Safe and Sound

Five Points Bank of Hastings

Hastings, NE
5
Star Rating
Hastings, NE-based Five Points Bank of Hastings is an FDIC-insured bank founded in 1893. Regulatory filings show the bank having equity of $35.6 million on assets of $300.5 million, as of December 31, 2017.

U.S. bank customers have $262.6 million on deposit at 3 offices in NE run by 38 full-time employees. With that footprint, the bank currently holds loans and leases worth $133.8 million, $86.2 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, Five Points Bank of Hastings exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three major criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial resilience, capital is essential. It acts as a cushion against losses and as protection for depositors during periods of financial instability for the bank. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, Five Points Bank of Hastings racked up 14 out of a possible 30 points, beating the national average of 13.13.

A bank's Tier 1 capital ratio is an important measure of this buffer. Five Points Bank of Hastings's Tier 1 capital ratio was 19.70 percent, exceeding the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to financial difficulties.

Overall, Five Points Bank of Hastings held equity amounting to 11.86 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 impact of troubled assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

A bank with lots of these kinds of assets could eventually have to use capital to absorb losses, decreasing 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 interest for the bank, pushing down earnings and elevating the chances of a future failure.

Five Points Bank of Hastings scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 37.49.

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, none of Five Points Bank of Hastings's loans were noncurrent -- in other words, 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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . That reserve's size can be a useful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Five Points Bank of Hastings's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, lessen a bank's ability to do those things.

On Bankrate's earnings test, Five Points Bank of Hastings scored 18 out of a possible 30, exceeding the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Five Points Bank of Hastings's most recent annualized quarterly return on equity was 9.58 percent, above the national average of 8.10 percent.

The bank reported net income of $3.3 million on total equity of $35.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.14 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.