Safe and Sound

Anna State Bank

Anna, IL
5
Star Rating
Anna State Bank is an FDIC-insured bank started in 1930 and currently based in Anna, IL. The bank holds equity of $12.4 million on assets of $76.9 million, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 20 full-time employees, the bank has amassed loans and leases worth $35.8 million, including $33.1 million worth of real estate loans. The bank currently holds $64.4 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Anna State Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three major 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 works as a buffer 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 a bank's financial stability, capital is essential. When it comes to safety and soundness, the higher the capital, the better.
Anna State Bank scored 24 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 13.38.

A bank's Tier 1 capital ratio is an essential measure of this buffer. Anna State Bank's Tier 1 capital ratio was 34.79 percent, exceeding the 6 percent level considered adequate by regulators, and exceeding the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial difficulties.

Overall, Anna State Bank held equity amounting to 16.12 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid mortgages.

Having a large number of these kinds of assets means a bank may have to use capital to absorb losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, Anna State Bank scored 40 out of a possible 40 points, exceeding the national average of 37.62 points.

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, 0.42 percent of Anna State 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 keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the that reserve's size 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 Anna State Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, reduce a bank's ability to do those things.

Anna State Bank fell short of the national average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.

One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Anna State Bank's most recent annualized quarterly return on equity was 6.05 percent, below the national average of 9.28 percent.

The bank earned net income of $369,000 on total equity of $12.4 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.96 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.