Safe and Sound

The First National Bank of Las Animas

Las Animas, CO
5
Star Rating
The First National Bank of Las Animas is a Las Animas, CO-based, FDIC-insured bank dating back to 1901. As of December 31, 2017, the bank held equity of $41.8 million on $338.8 million in assets.

U.S. bank customers have $285.2 million on deposit at 6 offices in CO run by 71 full-time employees. With that footprint, the bank has amassed loans and leases worth $242.8 million, including real estate loans of $179.7 million.

Overall, Bankrate believes that, as of December 31, 2017, The First National Bank of Las Animas exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three important criteria Bankrate used to evaluate American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a bank's financial fortitude. It acts as a bulwark against losses and provides protection for accountholders during periods of financial instability for the bank. From a safety and soundness perspective, the higher the capital, the better.

The First National Bank of Las Animas beat out the national average of 13.13 points on our test to measure capital adequacy, achieving a score of 16 out of a possible 30 points.

One important measure of this buffer is a bank's Tier 1 capital ratio. The First National Bank of Las Animas's Tier 1 capital ratio was 14.71 percent, above the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial difficulties.

Overall, The First National Bank of Las Animas held equity amounting to 12.35 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as past-due loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with lots of these kinds of assets could eventually be forced 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 interest for the bank, diminishing earnings and increasing the chances of a future failure.

The First National Bank of Las Animas scored above the national average of 37.49 on Bankrate's asset quality test, 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, none of The First National Bank of Las Animas'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 useful 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 The First National Bank of Las Animas's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. However, banks that are losing money have less ability to do those things.

On Bankrate's test of earnings, The First National Bank of Las Animas scored 28 out of a possible 30, exceeding the national average of 15.12.

One important measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The First National Bank of Las Animas's most recent annualized quarterly return on equity was 20.07 percent, above the national average of 8.10 percent.

The bank reported net income of $8.1 million on total equity of $41.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 2.38 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.