Safe and Sound

Academy Bank, National Association

Kansas City, MO
5
Star Rating
Academy Bank, National Association is a Kansas City, MO-based, FDIC-insured bank dating back to 1966. As of June 30, 2017, the bank had equity of $202.0 million on assets of $1.24 billion.

U.S. bank customers have $909.7 million on deposit at 81 offices in multiple states run by 621 full-time employees. With that footprint, the bank holds loans and leases worth $868.6 million, including $601.7 million worth of real estate loans.

Overall, Bankrate believes that, as of June 30, 2017, Academy Bank, National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three key criteria Bankrate used to score U.S. 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 works as a bulwark against losses and affords protection for depositors during times of economic trouble for the bank. When looking at safety and soundness, the more capital, the better.
Academy Bank, National Association achieved a score of 24 out of a possible 30 points on our test to measure the adequacy of a bank's capital, beating out the national average of 13.38.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Academy Bank, National Association's Tier 1 capital ratio was 20.44 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial challenges.

Overall, Academy Bank, National Association held equity amounting to 16.27 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these kinds of assets may eventually force a bank to use capital to cover losses, decreasing 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, decreasing earnings and increasing the risk of a failure in the future.

On Bankrate's test of asset quality, Academy Bank, National Association scored 40 out of a possible 40 points, exceeding the national average of 37.62 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 1.45 percent of Academy Bank, National Association's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks keep a reserve to deal with problem assets known as an "allowance for loan and lease losses." That reserve's size can be a useful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Academy Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.

Academy Bank, National Association fell behind the national average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.

One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Academy Bank, National Association's most recent annualized quarterly return on equity was 6.91 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $6.6 million on total equity of $202.0 million. The bank had an annualized return on average assets, or ROA, of 1.14 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and equal to the average for U.S. banks of 1.14 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.