Safe and Sound

American Metro Bank

Chicago, IL
3
Star Rating
American Metro Bank is a Chicago, IL-based, FDIC-insured bank dating back to 1997. The bank holds equity of $7.6 million on $63,163,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 17 full-time employees in 2 offices in IL, the bank holds loans and leases worth $49.6 million, including real estate loans of $48.7 million. U.S. bank customers currently have $46.3 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, American Metro Bank exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank faired on the three key criteria Bankrate used to grade American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for accountholders during periods of financial trouble for the bank. It follows then that when it comes to measuring an an institution's financial fortitude, capital is key. When looking at safety and soundness, the higher the capital, the better.
American Metro Bank exceeded the national average of 13.38 points on our test to measure capital adequacy, receiving a score of 16 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. American Metro Bank's Tier 1 capital ratio was 16.58 percent, above the 6 percent level regulators consider adequate, but under the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather economic challenges.

Overall, American Metro Bank held equity amounting to 12.01 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 troubled assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with large numbers of these kinds of assets may eventually have to use capital to cover losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, decreasing earnings and increasing the chances of a future failure.

On Bankrate's asset quality test, American Metro Bank scored 24 out of a possible 40 points, failing to reach 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, 2.33 percent of American Metro Bank'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 maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." Comparing the how large that reserve is to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on American Metro Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.

American Metro Bank scored 6 out of a possible 30 on Bankrate's test of earnings, less than the national average of 16.52.

One important way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. American Metro Bank's most recent annualized quarterly return on equity was 2.73 percent, below the national average of 9.28 percent.

The bank earned net income of $103,000 on total equity of $7.6 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.32 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.