Safe and Sound

Security National Bank

Witt, IL
4
Star Rating
Security National Bank is an FDIC-insured bank founded in 1932 and currently based in Witt, IL. Regulatory filings show the bank having equity of $8.4 million on $82.0 million in assets, as of December 31, 2017.

Thanks to the efforts of 24 full-time employees in 4 offices in IL, the bank currently holds loans and leases worth $53.4 million, including real estate loans of $41.1 million. U.S. bank customers currently have $67.3 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Security National 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 score American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for depositors during periods of economic instability for the bank. It follows then that a bank's level of capital is a key measurement of a bank's financial fortitude. When looking at safety and soundness, the more capital, the better.

Security National Bank finished below the national average of 13.13 on our test to measure capital adequacy, receiving a score of 12 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Security National Bank's Tier 1 capital ratio was 14.68 percent, above the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic challenges.

Overall, Security National Bank held equity amounting to 10.18 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as past-due mortgages, on the bank's capitalization and allocated loan loss reserves.

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

Security National Bank did better than the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 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, 0.99 percent of Security National Bank'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 troubled assets . Comparing the size of that reserve to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Security National Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand financial trouble. Losses, on the other hand, diminish a bank's ability to do those things.

On Bankrate's test of earnings, Security National Bank scored 14 out of a possible 30, below the national average of 15.12.

One key way to measure 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 Security National Bank was 6.12 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $514,000 on total equity of $8.4 million. The bank had an annualized return on average assets, or ROA, of 0.63 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.