Safe and Sound

The AMERICAN BANK OF SIDNEY, NEBRASKA

Sidney, NE
5
Star Rating
Founded in 1889, The AMERICAN BANK OF SIDNEY, NEBRASKA is an FDIC-insured bank based in Sidney, NE. As of June 30, 2017, the bank had equity of $10.5 million on assets of $89.8 million.

With 17 full-time employees in 2 offices in NE, the bank currently holds loans and leases worth $35.0 million, including real estate loans of $8.2 million. U.S. bank customers currently have $69.3 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, The AMERICAN BANK OF SIDNEY, NEBRASKA exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three major criteria Bankrate used to score U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for depositors when a bank is experiencing economic trouble. Therefore, a bank's level of capital is a useful measurement of a bank's financial strength. When it comes to safety and soundness, more capital is preferred.
The AMERICAN BANK OF SIDNEY, NEBRASKA scored above the national average of 13.38 points on our test to measure the adequacy of a bank's capital, racking up 14 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. The AMERICAN BANK OF SIDNEY, NEBRASKA's Tier 1 capital ratio was 23.49 percent, above 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 challenges.

Overall, The AMERICAN BANK OF SIDNEY, NEBRASKA held equity amounting to 11.72 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.

A bank with extensive holdings of these kinds of assets may eventually have to use capital to cover losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, diminishing earnings and increasing the risk of a future failure.

On Bankrate's test of asset quality, The AMERICAN BANK OF SIDNEY, NEBRASKA scored 40 out of a possible 40 points, beating out the national average of 37.62 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.09 percent of The AMERICAN BANK OF SIDNEY, NEBRASKA'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 keep 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 problematic loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. The AMERICAN BANK OF SIDNEY, NEBRASKA's loan loss allowance was 1,360.61 percent of its total noncurrent loans, exceeding the national average. All things being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, have less ability to do those things.

The AMERICAN BANK OF SIDNEY, NEBRASKA scored 16 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 (profit, basically) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for The AMERICAN BANK OF SIDNEY, NEBRASKA was 7.67 percent, below the national average of 9.28 percent.

The bank recorded net income of $396,000 on total equity of $10.5 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.90 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.