Safe and Sound

American Eagle Bank of Chicago

Chicago, IL
4
Star Rating
Founded in 2007, American Eagle Bank of Chicago is an FDIC-insured bank headquartered in Chicago, IL. Regulatory filings show the bank having equity of $9.2 million on $87,046,000 in assets, as of June 30, 2017.

With 7 full-time employees, the bank has amassed loans and leases worth $68.2 million, including real estate loans of $35.7 million. U.S. bank customers currently have $77.0 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, American Eagle Bank of Chicago exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three important criteria Bankrate used to grade American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for depositors during periods of financial trouble for the bank. It follows then that a bank's level of capital is an essential measurement of an institution's financial resilience. From a safety and soundness perspective, the higher the capital, the better.
American Eagle Bank of Chicago received a score of 12 out of a possible 30 points on our test to measure the adequacy of a bank's capital, coming in below the national average of 13.38.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. American Eagle Bank of Chicago's Tier 1 capital ratio was 12.65 percent, above the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to financial difficulties.

Overall, American Eagle Bank of Chicago held equity amounting to 10.59 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

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

A bank with large numbers of these types of assets could eventually be forced to use capital to cover losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, resulting in reduced earnings and potentially more risk of a failure in the future.

American Eagle Bank of Chicago did better than the national average of 37.62 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 helpful indicator of asset quality.As of June 30, 2017, 0.18 percent of American Eagle Bank of Chicago'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 1.04 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 helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on American Eagle Bank of Chicago's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.

American Eagle Bank of Chicago fell short of the national average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important measure of a bank's earnings. American Eagle Bank of Chicago's most recent annualized quarterly return on equity was 3.68 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $168,000 on total equity of $9.2 million. The bank experienced an annualized return on average assets, or ROA, of 0.39 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.