I don't look too much at others' opinions of our bank, I like to do my own analysis to come to my own conclusions. Sometimes though, it is useful to look for an independent opinion to help determine if I'm on the right track. So recently I took a look at www.bankrate.com's opinion of our bank for an independent analysis (not my analysis, and not the bank's analysis).
At www.bankrate.com they strive to generates independent opinions of most if not all banks and credit unions. I don't think they gain anything by trashing some banks and building up others. Like anybody's analysis, people can disagree with it, but it is a good comparison to my own analysis. Let's look at it anyway to see how close the two of us agree.
To get the analysis and opinion, click here.
Bankrate.com Overall Ratings:
For those who do not want to click the link, I'll summarize what it says. It is evaluating the year end 2010 financial statements.
- Overall Rating: 2 Stars (out of 5, 19.45% percentile rating, meaning that over 80% of banks were above it)
- Earnings Rating: 1 Star, 18.48% percentile (almost 82% of banks had a higher rating)
- Asset Quality: 2 Stars, 26.01% (almost 74% of banks were higher)
- Capital Rating: 4 Stars (67.25% percentile, about 33% or one third of banks were higher.)
- Liquidity Rating: 3 Stars 40.07% percentile
In addition they have some ratios that justify their opinion above. It also gives Bankrate.com's opinion of the ratio. By the way, the ratios shown reflect both good and bad performance, so I'm not cherry picking the info I want to show to help sell my story. In highlights, I've put my interpretation of Bankrate.com's ratings.
- Return on Equity: -3.36%- Substantially below average. Bad
- Net Interest Margin: 4.49%: Higher than peer Good
- Non Interest Income Level: 1.97- Solid Good
- Overhead: 3.99% (percentage of average assets)- Significantly Higher than average. Very Bad
- Non Performing Asset Ratio: 28.99%- Higher than standard Bad
- Loss Reserve Coverage: 87.83%- Approximately Normal Average
- Loan Yield: 7.04%- Conservative Conservative rather than Aggressive
- Asset Growth Rate: 68.19%- High Alarms them because this is unusual and is because of the second round of Equity Financing.
- Net Worth to Total Assets: 9.79%- Approximately peer Norm Average
- Regulatory Capital Ratio: 14.91%- Substantially exceeds requirements Good but remember it is because it includes TARP money and a second round of Equity Financing
- Balance Sheet Liquidity: 24.81% Better than Normal Good
- Purchased Liabilities: 12.77%- Average Dependence. Average
Bankrate.com Early Warning Highlights:
- High Overhead
- Commercial and Construction Real Estate Lending
- Asset Growth
Bankrate.com Composite Summary:
Bankrate believes that, as of December 31, 2010, this bank exhibited a below average condition, characterized by substantially lower than normal overall, sustainable profitability, questionable asset quality, strong capitalization and near normal liquidity.