Safe and Sound

State Bank of St. Jacob

Saint Jacob, IL
5
Star Rating
Saint Jacob, IL-based State Bank of St. Jacob is an FDIC-insured bank started in 1903. As of December 31, 2017, the bank had equity of $9.5 million on assets of $59.9 million.

Thanks to the work of 10 full-time employees in 2 offices in IL, the bank holds loans and leases worth $25.2 million, including $17.3 million worth of real estate loans. The bank currently holds $50.1 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, State Bank of St. Jacob 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 important criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial stability, capital is useful. It acts as a buffer against losses and as protection for depositors when a bank is struggling financially. When looking at safety and soundness, the higher the capital, the better.

State Bank of St. Jacob did better than the national average of 13.13 points on our test to measure the adequacy of a bank's capital, racking up 22 out of a possible 30 points.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. State Bank of St. Jacob's Tier 1 capital ratio was 29.68 percent, above the 6 percent level regulators consider adequate, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, State Bank of St. Jacob held equity amounting to 15.91 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

Having a large number of these types of assets could eventually require a bank to use capital to absorb losses, decreasing 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 interest for the bank, diminishing earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, State Bank of St. Jacob scored 40 out of a possible 40 points, above the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 0.71 percent of State Bank of St. Jacob'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." How large that reserve is can be a widely used indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on State Bank of St. Jacob's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

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

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. State Bank of St. Jacob's most recent annualized quarterly return on equity was 10.22 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $953,000 on total equity of $9.5 million. The bank experienced an annualized return on average assets, or ROA, of 1.58 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.