Safe and Sound

The Stock Exchange Bank, Caldwell, Kansas

Caldwell, KS
4
Star Rating
Caldwell, KS-based The Stock Exchange Bank, Caldwell, Kansas is an FDIC-insured bank started in 1881. Regulatory filings show the bank having equity of $4.1 million on assets of $52.1 million, as of December 31, 2017.

With 15 full-time employees in 2 offices in KS, the bank holds loans and leases worth $42.4 million, including real estate loans of $28.4 million. U.S. bank customers currently have $45.7 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Stock Exchange Bank, Caldwell, Kansas exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three key criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a bank's financial resilience. It acts as a cushion against losses and affords protection for depositors when a bank is struggling financially. When it comes to safety and soundness, the more capital, the better.

The Stock Exchange Bank, Caldwell, Kansas fell short of the national average of 13.13 on our test to measure capital adequacy, scoring 6 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. The Stock Exchange Bank, Caldwell, Kansas's Tier 1 capital ratio was 11.36 percent, higher than the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial downturns.

Overall, The Stock Exchange Bank, Caldwell, Kansas held equity amounting to 7.78 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

Having large numbers of these kinds of assets could eventually force a bank to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, decreasing earnings and elevating the risk of a future failure.

The Stock Exchange Bank, Caldwell, Kansas exceeded 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 handy indicator of asset quality.As of December 31, 2017, 0.27 percent of The Stock Exchange Bank, Caldwell, Kansas'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 to handle problem assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of problematic loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on The Stock Exchange Bank, Caldwell, Kansas's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank better prepared to withstand financial shocks. Obviously, banks that are losing money are less able to do those things.

The Stock Exchange Bank, Caldwell, Kansas scored 14 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for The Stock Exchange Bank, Caldwell, Kansas was 6.81 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $268,000 on total equity of $4.1 million. The bank experienced an annualized return on average assets, or ROA, of 0.52 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.