Safe and Sound

The Atlanta National Bank

Atlanta, IL
4
Star Rating
Atlanta, IL-based The Atlanta National Bank is an FDIC-insured bank started in 1887. The bank holds equity of $7.7 million on $62,182,000 in assets, according to June 30, 2017, regulatory filings.

U.S. bank customers have $53.8 million on deposit at 2 offices in IL run by 15 full-time employees. With that footprint, the bank has amassed loans and leases worth $17.9 million, $10.1 million of which are for real estate.

Overall, Bankrate believes that, as of June 30, 2017, The Atlanta National Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three major criteria Bankrate used to score U.S. banks.

WHAT IS
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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is useful. It works as a bulwark against losses and affords protection for accountholders when a bank is experiencing economic trouble. When it comes to safety and soundness, the more capital, the better.
The Atlanta National Bank scored 16 out of a possible 30 points on our test to measure capital adequacy, above the national average of 13.38.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. The Atlanta National Bank's Tier 1 capital ratio was 30.44 percent, above the 6 percent level considered adequate by regulators, and above the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to financial downturns.

Overall, The Atlanta National Bank held equity amounting to 12.37 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as past-due mortgages, on the bank's capitalization and allocated loan loss reserves.

A bank with extensive holdings of these kinds of assets could eventually be forced to use capital to absorb losses, cutting down on its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, The Atlanta National Bank scored 40 out of a possible 40 points, beating out the national average of 37.62 points.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.76 percent of The Atlanta National Bank'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 how large that reserve is to the total amount of at-risk loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on The Atlanta National Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money are less able to do those things.

On Bankrate's test of earnings, The Atlanta National Bank scored 10 out of a possible 30, below the national average of 16.52.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for The Atlanta National Bank was 4.76 percent, below the national average of 9.28 percent.

The bank reported net income of $177,000 on total equity of $7.7 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.59 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.