Safe and Sound

Anderson State Bank

Oneida, IL
5
Star Rating
Anderson State Bank is an FDIC-insured bank founded in 1917 and currently based in Oneida, IL. As of June 30, 2017, the bank had equity of $12.1 million on $82,397,000 in assets.

Thanks to the work of 7 full-time employees, the bank holds loans and leases worth $26.7 million, including $13.3 million worth of real estate loans. The bank currently holds $70.1 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Anderson State Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank faired on the three major criteria Bankrate used to grade American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a bank's financial fortitude. It works as a bulwark against losses and as protection for depositors when a bank is experiencing financial instability. When looking at safety and soundness, more capital is preferred.
Anderson State Bank beat out the national average of 13.38 points on our test to measure the adequacy of a bank's capital, receiving a score of 20 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Anderson State Bank's Tier 1 capital ratio was 31.69 percent, higher than the 6 percent level regulators consider adequate, and exceeding the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather financial difficulties.

Overall, Anderson State Bank held equity amounting to 14.66 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

A bank with large numbers of these types of assets may eventually have to use capital to cover losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

Anderson State Bank scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 0.03 percent of Anderson State 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 to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the the size of that reserve to the total amount of at-risk loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Anderson State Bank's loan loss allowance was 3,942.86 percent of its total noncurrent loans, higher than the national average. All things being equal, a higher ratio of loan loss allowance to noncurrent loans is better.

Earnings score

A bank's ability to earn money affects its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.

Anderson State Bank scored 10 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 16.52.

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. The most recent annualized quarterly return on equity for Anderson State Bank was 4.31 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $257,000 on total equity of $12.1 million. The bank experienced an annualized return on average assets, or ROA, of 0.62 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.