Safe and Sound

Amistad Bank

Del Rio, TX
5
Star Rating
Amistad Bank is a Del Rio, TX-based, FDIC-insured bank that opened its doors in 1986. The bank holds equity of $4.0 million on $28,846,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the work of 8 full-time employees, the bank has amassed loans and leases worth $19.7 million, including $19.0 million worth of real estate loans. U.S. bank customers currently have $24.5 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Amistad Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank faired on the three important criteria Bankrate used to score U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for accountholders during periods of economic instability for the bank. It follows then that when it comes to measuring an an institution's financial fortitude, capital is valuable. When looking at safety and soundness, the higher the capital, the better.
On our test to measure the adequacy of a bank's capital, Amistad Bank scored 18 out of a possible 30 points, above the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Amistad Bank's Tier 1 capital ratio was 18.43 percent, above the 6 percent level considered adequate by regulators, but below the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to economic difficulties.

Overall, Amistad Bank held equity amounting to 13.91 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 troubled assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

Having lots of these types of assets suggests a bank may eventually have to use capital to cover losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, decreasing earnings and increasing the chances of a failure in the future.

Amistad Bank scored 40 out of a possible 40 points on Bankrate's test of asset quality, above the national average of 37.62.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, none of Amistad Bank'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 troubled assets . Comparing the the size of that reserve to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Amistad Bank'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 buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.

Amistad Bank scored 14 out of a possible 30 on Bankrate's earnings test, less than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Amistad Bank was 7.06 percent, below the national average of 9.28 percent.

The bank reported net income of $139,000 on total equity of $4.0 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.98 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.