Safe and Sound

Argentine Federal Savings

Kansas City, KS
4
Star Rating
Founded in 1906, Argentine Federal Savings is an FDIC-insured bank headquartered in Kansas City, KS. The bank holds equity of $7.2 million on $51,109,000 in assets, according to June 30, 2017, regulatory filings.

U.S. bank customers have $38.7 million on deposit at 2 offices in KS run by 10 full-time employees. With that footprint, the bank holds loans and leases worth $39.0 million, $39.1 million of which are for real estate.

Overall, Bankrate believes that, as of June 30, 2017, Argentine Federal Savings exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three key criteria Bankrate used to grade U.S. banks.

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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 trouble for the bank. It follows then that a bank's level of capital is a valuable measurement of a bank's financial fortitude. When looking at safety and soundness, the higher the capital, the better.
On our test to measure the adequacy of a bank's capital, Argentine Federal Savings racked up 20 out of a possible 30 points, beating out the national average of 13.38.

A bank's Tier 1 capital ratio is an important measure of this buffer. Argentine Federal Savings's Tier 1 capital ratio was 27.44 percent, exceeding the 6 percent level considered adequate by regulators, and exceeding the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to financial difficulties.

Overall, Argentine Federal Savings held equity amounting to 14.07 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due loans.

A bank with extensive holdings of these kinds of assets could eventually be forced to use capital to absorb losses, decreasing its cushion 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 reduced earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, Argentine Federal Savings scored 40 out of a possible 40 points, above 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, 0.33 percent of Argentine Federal Savings'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the that reserve's size to the total amount of problem loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Argentine Federal Savings's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial shocks. Banks that are losing money, however, have less ability to do those things.

On Bankrate's earnings test, Argentine Federal Savings scored 6 out of a possible 30, lower than the national average of 16.52.

One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for Argentine Federal Savings was 2.21 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $79,000 on total equity of $7.2 million. The bank had an annualized return on average assets, or ROA, of 0.31 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.