Safe and Sound

The American National Bank of Mount Pleasant

Mount Pleasant, TX
5
Star Rating
Mount Pleasant, TX-based The American National Bank of Mount Pleasant is an FDIC-insured bank founded in 1979. As of June 30, 2017, the bank held equity of $11.9 million on $92,684,000 in assets.

With 25 full-time employees, the bank holds loans and leases worth $58.8 million, including real estate loans of $34.5 million. U.S. bank customers currently have $80.6 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, The American National Bank of Mount Pleasant exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the bank faired on the three key 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 an institution's financial fortitude, capital is essential. It works as a cushion against losses and provides protection for accountholders during times of financial trouble for the bank. From a safety and soundness perspective, the higher the capital, the better.
The American National Bank of Mount Pleasant exceeded the national average of 13.38 points on our test to measure the adequacy of a bank's capital, receiving a score of 16 out of a possible 30 points.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. The American National Bank of Mount Pleasant's Tier 1 capital ratio was 20.41 percent, above the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to economic downturns.

Overall, The American National Bank of Mount Pleasant held equity amounting to 12.86 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

Having a large number of these kinds of assets suggests a bank may eventually have to use capital to absorb losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, diminishing earnings and elevating the chances of a failure in the future.

On Bankrate's test of asset quality, The American National Bank of Mount Pleasant scored 40 out of a possible 40 points, better than the national average of 37.62 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, 0.47 percent of The American National Bank of Mount Pleasant'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 known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the that reserve's size to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on The American National Bank of Mount Pleasant's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

The American National Bank of Mount Pleasant scored 22 out of a possible 30 on Bankrate's earnings test, better than the national average of 16.52.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for The American National Bank of Mount Pleasant was 13.64 percent, above the national average of 9.28 percent.

The bank earned net income of $789,000 on total equity of $11.9 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.70 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.