Safe and Sound

First State Bank of St. Peter

Saint Peter, IL
5
Star Rating
First State Bank of St. Peter is an FDIC-insured bank started in 1908 and currently based in Saint Peter, IL. Regulatory filings show the bank having equity of $4.6 million on $28.7 million in assets, as of December 31, 2017.

Thanks to the work of 6 full-time employees, the bank holds loans and leases worth $10.2 million, including $6.3 million worth of real estate loans. The bank currently holds $24.0 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, First State Bank of St. Peter exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to score American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for depositors when a bank is struggling financially. It follows then that when it comes to measuring an a bank's financial fortitude, capital is important. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, First State Bank of St. Peter scored 22 out of a possible 30 points, above the national average of 13.13.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. First State Bank of St. Peter's Tier 1 capital ratio was 33.33 percent, exceeding the 6 percent level considered adequate by regulators, and higher than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather financial headwinds.

Overall, First State Bank of St. Peter held equity amounting to 15.87 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid loans.

A bank with lots of these types of assets may eventually have to use capital to cover losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, decreasing earnings and elevating the chances of a future failure.

First State Bank of St. Peter did better than the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.31 percent of First State Bank of St. Peter'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 the size of that reserve to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on First State Bank of St. Peter's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.

First State Bank of St. Peter scored 18 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 15.12.

One important way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for First State Bank of St. Peter was 8.77 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $396,000 on total equity of $4.6 million. The bank had an annualized return on average assets, or ROA, of 1.37 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.