Safe and Sound

Peoples Bank of Wyaconda, Missouri

Kahoka, MO
4
Star Rating
Peoples Bank of Wyaconda, Missouri is a Kahoka, MO-based, FDIC-insured bank that opened its doors in 1914. Regulatory filings show the bank having equity of $9.1 million on $102.0 million in assets, as of December 31, 2017.

U.S. bank customers have $91.4 million on deposit at 3 offices in MO run by 23 full-time employees. With that footprint, the bank has amassed loans and leases worth $62.9 million, $42.2 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, Peoples Bank of Wyaconda, Missouri exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank fared on the three major criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a bank's financial strength. It works as a cushion against losses and as protection for accountholders during times of financial trouble for the bank. When it comes to safety and soundness, more capital is better.

Peoples Bank of Wyaconda, Missouri received a score of 8 out of a possible 30 points on our test to measure capital adequacy, coming in below the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Peoples Bank of Wyaconda, Missouri's Tier 1 capital ratio was 14.08 percent, exceeding the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial challenges.

Overall, Peoples Bank of Wyaconda, Missouri held equity amounting to 8.94 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

A bank with extensive holdings of these kinds of assets could eventually be forced to use capital to absorb losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and increasing the risk of a failure in the future.

Peoples Bank of Wyaconda, Missouri beat out the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.02 percent of Peoples Bank of Wyaconda, Missouri'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Peoples Bank of Wyaconda, Missouri's loan loss allowance was 9,418.18 percent of its total noncurrent loans, higher than the national average. All things being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

Peoples Bank of Wyaconda, Missouri beat the national average on Bankrate's earnings test, achieving a score of 16 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. The most recent annualized quarterly return on equity for Peoples Bank of Wyaconda, Missouri was 7.56 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $674,000 on total equity of $9.1 million. The bank reported an annualized return on average assets, or ROA, of 0.71 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.