Safe and Sound

First County Bank

New Baden, IL
4
Star Rating
First County Bank is a New Baden, IL-based, FDIC-insured bank that opened its doors in 1915. Regulatory filings show the bank having equity of $43.2 million on assets of $496.3 million, as of June 30, 2017.

Thanks to the efforts of 82 full-time employees in 7 offices in IL, the bank holds loans and leases worth $409.9 million, including real estate loans of $369.7 million. The bank currently holds $400.9 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, First County Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three key criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial resilience. It works as a bulwark against losses and provides protection for accountholders during times of economic trouble for the bank. When it comes to safety and soundness, the higher the capital, the better.
On our test to measure the adequacy of a bank's capital, First County Bank received a score of 8 out of a possible 30 points, less than the national average of 13.38.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. First County Bank's Tier 1 capital ratio was 13.54 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to financial headwinds.

Overall, First County Bank held equity amounting to 8.71 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

A bank with large numbers of these kinds of assets may eventually have to use capital to absorb losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

First County Bank scored 32 out of a possible 40 points on Bankrate's asset quality test, below the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, 1.58 percent of First County Bank's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks keep a reserve to deal with problem assets known as an "allowance for loan and lease losses." How large that reserve is can be a useful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on First County Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money have less ability to do those things.

On Bankrate's test of earnings, First County Bank scored 18 out of a possible 30, better than the national average of 16.52.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. First County Bank's most recent annualized quarterly return on equity was 9.67 percent, above the national average of 9.28 percent.

The bank reported net income of $2.0 million on total equity of $43.2 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.82 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.