Safe and Sound

Schaumburg Bank & Trust Company, National Association

Schaumburg, IL
4
Star Rating
Schaumburg Bank & Trust Company, National Association is a Schaumburg, IL-based, FDIC-insured bank started in 2001. The bank holds equity of $122.0 million on assets of $1.10 billion, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 63 full-time employees in 8 offices in IL, the bank has amassed loans and leases worth $847.2 million, including real estate loans of $330.1 million. U.S. bank customers currently have $958.4 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Schaumburg Bank & Trust Company, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to grade American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial strength. It works as a cushion against losses and affords protection for depositors when a bank is experiencing financial trouble. From a safety and soundness perspective, more capital is better.
On our test to measure capital adequacy, Schaumburg Bank & Trust Company, National Association received a score of 10 out of a possible 30 points, failing to reach the national average of 13.38.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Schaumburg Bank & Trust Company, National Association's Tier 1 capital ratio was 10.73 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to financial downturns.

Overall, Schaumburg Bank & Trust Company, National Association held equity amounting to 11.05 percent of its assets, which was lower than 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 troubled assets, such as past-due mortgages.

Having large numbers of these kinds of assets may eventually require a bank to use capital to absorb losses, shrinking its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and increasing the chances of a future failure.

Schaumburg Bank & Trust Company, National Association fell below the national average of 37.62 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

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, 0.67 percent of Schaumburg Bank & Trust Company, National Association'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 maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." Comparing the how large that reserve is to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Schaumburg Bank & Trust Company, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

On Bankrate's earnings test, Schaumburg Bank & Trust Company, National Association scored 12 out of a possible 30, failing to reach the national average of 16.52.

One key way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for Schaumburg Bank & Trust Company, National Association was 6.12 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $3.6 million on total equity of $122.0 million. The bank reported an annualized return on average assets, or ROA, of 0.68 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.