Safe and Sound

Lamont Bank of St. John

Saint John, WA
5
Star Rating
Lamont Bank of St. John is an FDIC-insured bank founded in 1908 and currently based in Saint John, WA. Regulatory filings show the bank having equity of $5.7 million on assets of $48.5 million, as of December 31, 2017.

With 5 full-time employees, the bank currently holds loans and leases worth $14.5 million, including real estate loans of $23,000. U.S. bank customers currently have $42.9 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Lamont Bank of St. John exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three important 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 works as a cushion against losses and provides protection for depositors during times of economic trouble for the bank. It follows then that a bank's level of capital is a valuable measurement of a bank's financial fortitude. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a bank's capital, Lamont Bank of St. John racked up 14 out of a possible 30 points, beating out the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Lamont Bank of St. John's Tier 1 capital ratio was 23.76 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic downturns.

Overall, Lamont Bank of St. John held equity amounting to 11.64 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due loans.

A bank with a large number of these types of assets may eventually be required to use capital to absorb losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

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

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, 1.22 percent of Lamont Bank of St. John'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 1.01 percent.

Banks keep a reserve to deal with problem assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of at-risk loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Lamont Bank of St. John's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.

Lamont Bank of St. John exceeded the national average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.

One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Lamont Bank of St. John's most recent annualized quarterly return on equity was 10.99 percent, above the national average of 8.10 percent.

The bank earned net income of $595,000 on total equity of $5.7 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.29 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.