Safe and Sound

First Federal Community Bank of Bucyrus

Bucyrus, OH
4
Star Rating
First Federal Community Bank of Bucyrus is a Bucyrus, OH-based, FDIC-insured bank started in 1887. The bank holds equity of $13.0 million on assets of $145.0 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 65 full-time employees in 5 offices in OH, the bank holds loans and leases worth $108.1 million, including real estate loans of $94.1 million. U.S. bank customers currently have $104.7 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, First Federal Community Bank of Bucyrus exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial strength. It works as a buffer against losses and provides protection for accountholders during periods of economic trouble for the bank. When looking at safety and soundness, the higher the capital, the better.

First Federal Community Bank of Bucyrus scored below the national average of 13.13 on our test to measure the adequacy of a bank's capital, racking up 8 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. First Federal Community Bank of Bucyrus's Tier 1 capital ratio was 13.39 percent, higher than the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather financial headwinds.

Overall, First Federal Community Bank of Bucyrus held equity amounting to 8.98 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid mortgages, on the bank's capitalization and allocated loan loss reserves.

A bank with large numbers of these kinds of assets could eventually have to use capital to absorb losses, diminishing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, decreasing earnings and increasing the chances of a failure in the future.

On Bankrate's asset quality test, First Federal Community Bank of Bucyrus scored 36 out of a possible 40 points, coming in below the national average of 37.49 points.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.95 percent of First Federal Community Bank of Bucyrus's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing how large that reserve is to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on First Federal Community Bank of Bucyrus's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.

On Bankrate's earnings test, First Federal Community Bank of Bucyrus scored 14 out of a possible 30, below the national average of 15.12.

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 Federal Community Bank of Bucyrus's most recent annualized quarterly return on equity was 7.22 percent, below the national average of 8.10 percent.

The bank recorded net income of $908,000 on total equity of $13.0 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.63 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.