Safe and Sound

Atlantic Coast Bank

Jacksonville, FL
4
Star Rating
Atlantic Coast Bank is an FDIC-insured bank founded in 1939 and currently based in Jacksonville, FL. The bank has equity of $89.2 million on $913,418,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 183 full-time employees in 11 offices in multiple states, the bank holds loans and leases worth $788.2 million, including $656.2 million worth of real estate loans. U.S. bank customers currently have $690.1 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Atlantic Coast Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three key criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for depositors when a bank is struggling financially. It follows then that when it comes to measuring an a bank's financial resilience, capital is valuable. When it comes to safety and soundness, the higher the capital, the better.
Atlantic Coast Bank received a score of 10 out of a possible 30 points on our test to measure the adequacy of a bank's capital, lower than the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Atlantic Coast Bank's Tier 1 capital ratio was 11.83 percent, higher than 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 difficulties.

Overall, Atlantic Coast Bank held equity amounting to 9.77 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid loans, on the bank's loan loss reserves and overall capitalization.

Having lots of these types of assets may eventually force a bank to use capital to absorb losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and increasing the risk of a failure in the future.

On Bankrate's test of asset quality, Atlantic Coast Bank scored 36 out of a possible 40 points, falling short of the national average of 37.62 points.

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, 1.23 percent of Atlantic Coast Bank's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above 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 problem assets. Unfortunately, the FDIC did not provide information on Atlantic Coast Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand financial shocks. Conversely, losses take away from a bank's ability to do those things.

Atlantic Coast Bank received below-average marks on Bankrate's earnings test, achieving a score of 14 out of a possible 30.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Atlantic Coast Bank was 6.42 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $2.8 million on total equity of $89.2 million. The bank experienced an annualized return on average assets, or ROA, of 0.61 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.