Safe and Sound

Atkins Savings Bank & Trust

Atkins, IA
5
Star Rating
Atkins Savings Bank & Trust is an Atkins, IA-based, FDIC-insured bank started in 1915. As of June 30, 2017, the bank had equity of $10.7 million on assets of $84.4 million.

Thanks to the efforts of 9 full-time employees, the bank has amassed loans and leases worth $54.0 million, including real estate loans of $28.2 million. The bank currently holds $73.2 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Atkins Savings Bank & Trust exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three important criteria Bankrate used to score American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial strength, capital is valuable. It works as a cushion against losses and affords protection for depositors during times of economic trouble for the bank. When it comes to safety and soundness, more capital is preferred.
On our test to measure capital adequacy, Atkins Savings Bank & Trust achieved a score of 16 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. Atkins Savings Bank & Trust's Tier 1 capital ratio was 16.71 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather financial challenges.

Overall, Atkins Savings Bank & Trust held equity amounting to 12.67 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 mortgages.

Having large numbers of these types of assets means a bank could have to use capital to cover losses, diminishing its cushion of equity. 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.

Atkins Savings Bank & Trust did better than the national average of 37.62 on Bankrate's asset quality test, racking up 40 out of a possible 40 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, 0.16 percent of Atkins Savings Bank & Trust'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 . How large that reserve is can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Atkins Savings Bank & Trust's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.

Atkins Savings Bank & Trust scored 20 out of a possible 30 on Bankrate's test of earnings, above the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. Atkins Savings Bank & Trust's most recent annualized quarterly return on equity was 12.70 percent, above the national average of 9.28 percent.

The bank earned net income of $640,000 on total equity of $10.7 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.51 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.