Safe and Sound

Anchor Commercial Bank

Juno Beach, FL
4
Star Rating
Anchor Commercial Bank is a Juno Beach, FL-based, FDIC-insured bank dating back to 2005. The bank holds equity of $12.2 million on assets of $123.2 million, according to June 30, 2017, regulatory filings.

Thanks to the work of 23 full-time employees in 2 offices in FL, the bank has amassed loans and leases worth $89.7 million, including $75.6 million worth of real estate loans. The bank currently holds $110.9 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Anchor Commercial Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank faired on the three key criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for accountholders when a bank is struggling financially. It follows then that a bank's level of capital is a crucial measurement of an institution's financial resilience. When looking at safety and soundness, the more capital, the better.
Anchor Commercial Bank fell below the national average of 13.38 on our test to measure the adequacy of a bank's capital, racking up 10 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Anchor Commercial Bank's Tier 1 capital ratio was 13.22 percent, exceeding the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial downturns.

Overall, Anchor Commercial Bank held equity amounting to 9.93 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 mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with lots of these kinds of assets may eventually have to use capital to absorb losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

Anchor Commercial Bank finished below the national average of 37.62 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 0.48 percent of Anchor Commercial Bank's loans were noncurrent, meaning 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 keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a handy 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 Anchor Commercial Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.

Anchor Commercial Bank scored 12 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. Anchor Commercial Bank's most recent annualized quarterly return on equity was 5.71 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $342,000 on total equity of $12.2 million. The bank had an annualized return on average assets, or ROA, of 0.57 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.