Safe and Sound

The Roberts County National Bank of Sisseton

Sisseton, SD
5
Star Rating
The Roberts County National Bank of Sisseton is a Sisseton, SD-based, FDIC-insured bank dating back to 1896. As of December 31, 2017, the bank had equity of $8.5 million on assets of $55.0 million.

With 11 full-time employees, the bank currently holds loans and leases worth $15.2 million, including real estate loans of $6.7 million. U.S. bank customers currently have $46.3 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Roberts County National Bank of Sisseton exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three key criteria Bankrate used to grade American banks on safety and soundness.

WHAT IS
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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial strength. It acts as a cushion against losses and as protection for depositors when a bank is struggling financially. From a safety and soundness perspective, the higher the capital, the better.

The Roberts County National Bank of Sisseton did better than the national average of 13.13 points on our test to measure the adequacy of a bank's capital, receiving a score of 22 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. The Roberts County National Bank of Sisseton's Tier 1 capital ratio was 34.34 percent, exceeding the 6 percent level considered adequate by regulators, and above the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic challenges.

Overall, The Roberts County National Bank of Sisseton held equity amounting to 15.44 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test's purpose is 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 lots of these kinds of assets may eventually be forced to use capital to absorb losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, The Roberts County National Bank of Sisseton scored 40 out of a possible 40 points, beating the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, none of The Roberts County National Bank of Sisseton'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 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 problem loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on The Roberts County National Bank of Sisseton's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial trouble. However, banks that are losing money are less able to do those things.

The Roberts County National Bank of Sisseton scored 14 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one widely used measure of a bank's earnings. The Roberts County National Bank of Sisseton's most recent annualized quarterly return on equity was 6.74 percent, below the national average of 8.10 percent.

The bank reported net income of $586,000 on total equity of $8.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.02 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.