Safe and Sound

Quarry City Savings and Loan Association

Warrensburg, MO
5
Star Rating
Quarry City Savings and Loan Association is an FDIC-insured bank started in 1890 and currently headquartered in Warrensburg, MO. As of December 31, 2017, the bank had equity of $8.6 million on $51.5 million in assets.

With 13 full-time employees, the bank holds loans and leases worth $42.5 million, including real estate loans of $41.2 million. U.S. bank customers currently have $42.7 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Quarry City Savings and Loan Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three key criteria Bankrate used to score 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 stability, capital is crucial. It acts as a bulwark against losses and provides protection for depositors when a bank is struggling financially. When looking at safety and soundness, more capital is better.

On our test to measure capital adequacy, Quarry City Savings and Loan Association racked up 24 out of a possible 30 points, exceeding the national average of 13.13.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Quarry City Savings and Loan Association's Tier 1 capital ratio was 23.93 percent, above the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather financial headwinds.

Overall, Quarry City Savings and Loan Association held equity amounting to 16.73 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as past-due loans.

A bank with extensive holdings of these types of assets could eventually have to use capital to absorb losses, diminishing its buffer 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, reducing earnings and increasing the chances of a future failure.

On Bankrate's test of asset quality, Quarry City Savings and Loan Association scored 40 out of a possible 40 points, beating out the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, none of Quarry City Savings and Loan Association'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 to handle troubled assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of problem loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Quarry City Savings and Loan Association'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, increasing its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand financial trouble. Banks that are losing money, however, are less able to do those things.

Quarry City Savings and Loan Association fell short of the national average on Bankrate's earnings test, achieving a score of 6 out of a possible 30.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Quarry City Savings and Loan Association's most recent annualized quarterly return on equity was 2.99 percent, below the national average of 8.10 percent.

The bank earned net income of $253,000 on total equity of $8.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.48 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.