Safe and Sound

Illini State Bank

Oglesby, IL
4
Star Rating
Illini State Bank is an FDIC-insured bank founded in 1914 and currently based in Oglesby, IL. As of December 31, 2017, the bank had equity of $17.9 million on assets of $115.3 million.

Thanks to the efforts of 19 full-time employees in 3 offices in IL, the bank holds loans and leases worth $48.8 million, including real estate loans of $31.3 million. The bank currently holds $81.7 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Illini State Bank 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 major criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for account holders during times of economic trouble for the bank. Therefore, when it comes to measuring an a bank's financial resilience, capital is important. When looking at safety and soundness, the more capital, the better.

Illini State Bank scored 14 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 13.13.

One important measure of this buffer is a bank's Tier 1 capital ratio. Illini State Bank's Tier 1 capital ratio was 22.52 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, Illini State Bank held equity amounting to 15.53 percent of its assets, which exceeded 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 reserves set aside to cover loan losses, as well as overall capitalization.

A bank with a large number of these kinds of assets could eventually be forced to use capital to cover losses, reducing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in depressed earnings and potentially more risk of a failure in the future.

Illini State Bank scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, none of Illini State Bank'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 keep a reserve to handle troubled 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 troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Illini State Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.

On Bankrate's earnings test, Illini State Bank scored 12 out of a possible 30, lower than the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Illini State Bank was 5.00 percent, below the national average of 8.10 percent.

The bank earned net income of $906,000 on total equity of $17.9 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.77 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.