Safe and Sound

Academy Bank, National Association

Kansas City, MO
5
Star Rating
Academy Bank, National Association is an FDIC-insured bank started in 1966 and currently headquartered in Kansas City, MO. As of December 31, 2017, the bank had equity of $205.5 million on assets of $1.27 billion.

U.S. bank customers have $955.8 million on deposit at 82 offices in multiple states run by 594 full-time employees. With that footprint, the bank holds loans and leases worth $883.9 million, including real estate loans of $633.7 million.

Overall, Bankrate believes that, as of December 31, 2017, Academy Bank, National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three important criteria Bankrate used to grade American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for account holders when a bank is experiencing economic trouble. Therefore, when it comes to measuring an a bank's financial stability, capital is useful. When looking at safety and soundness, the higher the capital, the better.

Academy Bank, National Association did better than the national average of 13.13 points on our test to measure the adequacy of a bank's capital, racking up 22 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Academy Bank, National Association's Tier 1 capital ratio was 20.43 percent, above the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial downturns.

Overall, Academy Bank, National Association held equity amounting to 16.14 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as past-due loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these kinds of assets may eventually require a bank to use capital to absorb losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, Academy Bank, National Association scored 40 out of a possible 40 points, above the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 1.06 percent of Academy Bank, 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 above the national average of 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . How large that reserve is can be a useful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Academy Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

Academy Bank, National Association scored 12 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 15.12.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for Academy Bank, National Association was 5.94 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $11.7 million on total equity of $205.5 million. The bank reported an annualized return on average assets, or ROA, of 0.97 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.