Safe and Sound

The Dickinson County Bank

Enterprise, KS
4
Star Rating
Enterprise, KS-based The Dickinson County Bank is an FDIC-insured bank founded in 1894. As of December 31, 2017, the bank had equity of $1.4 million on assets of $12.4 million.

Thanks to the work of 5 full-time employees, the bank holds loans and leases worth $10.2 million, including $8.0 million worth of real estate loans. U.S. bank customers currently have $11.0 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Dickinson County Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three major criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for account holders when a bank is experiencing economic instability. It follows then that when it comes to measuring an an institution's financial fortitude, capital is valuable. When looking at safety and soundness, more capital is preferred.

On our test to measure capital adequacy, The Dickinson County Bank scored 14 out of a possible 30 points, exceeding the national average of 13.13.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. The Dickinson County Bank's Tier 1 capital ratio was 16.81 percent, higher than the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather economic headwinds.

Overall, The Dickinson County Bank held equity amounting to 11.63 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

Having lots of these kinds of assets means a bank may have to use capital to absorb losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

The Dickinson County Bank scored 32 out of a possible 40 points on Bankrate's asset quality test, falling short of the national average of 37.49.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 2.03 percent of The Dickinson County Bank'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 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 useful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on The Dickinson County 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. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank better prepared to withstand financial shocks. However, banks that are losing money have less ability to do those things.

The Dickinson County Bank scored 22 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for The Dickinson County Bank was 13.42 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $184,000 on total equity of $1.4 million. The bank experienced an annualized return on average assets, or ROA, of 1.53 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.