Safe and Sound

Marquette Bank

Chicago, IL
3
Star Rating
Marquette Bank is a Chicago, IL-based, FDIC-insured bank dating back to 1945. As of June 30, 2017, the bank held equity of $170.1 million on $1,568,413,000 in assets.

Thanks to the work of 353 full-time employees in 24 offices in IL, the bank currently holds loans and leases worth $1.16 billion, $1.14 billion of which are for real estate. U.S. bank customers currently have $1.34 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Marquette Bank exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three key criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial fortitude, capital is important. It acts as a buffer against losses and as protection for depositors during times of financial instability for the bank. When it comes to safety and soundness, the more capital, the better.
On our test to measure capital adequacy, Marquette Bank received a score of 8 out of a possible 30 points, failing to reach the national average of 13.38.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Marquette Bank's Tier 1 capital ratio was 12.05 percent, exceeding the 6 percent level considered adequate by regulators, but below the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to economic headwinds.

Overall, Marquette Bank held equity amounting to 10.85 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

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

A bank with lots of these kinds of assets could eventually have to use capital to cover losses, diminishing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, resulting in lower earnings and potentially more risk of a failure in the future.

Marquette Bank scored 36 out of a possible 40 points on Bankrate's asset quality test, coming in below the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, 1.08 percent of Marquette Bank's loans were noncurrent -- in other words, 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 to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the that reserve's size to the total amount of problem loans can be a useful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Marquette Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.

Marquette Bank scored 10 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Marquette Bank's most recent annualized quarterly return on equity was 4.82 percent, below the national average of 9.28 percent.

The bank reported net income of $4.1 million on total equity of $170.1 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.52 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.