Safe and Sound

Alpine Bank & Trust Co.

Rockford, IL
5
Star Rating
Alpine Bank & Trust Co. is a Rockford, IL-based, FDIC-insured bank founded in 1962. The bank has equity of $107.9 million on $1.24 billion in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 345 full-time employees in 20 offices in IL, the bank holds loans and leases worth $823.3 million, including real estate loans of $532.0 million. The bank currently holds $1.10 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Alpine Bank & Trust Co. exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three key criteria Bankrate used to grade American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is crucial. It acts as a cushion against losses and provides protection for depositors when a bank is experiencing financial trouble. When it comes to safety and soundness, more capital is better.

Alpine Bank & Trust Co. came in below the national average of 13.13 on our test to measure capital adequacy, scoring 8 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Alpine Bank & Trust Co.'s Tier 1 capital ratio was 11.77 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial challenges.

Overall, Alpine Bank & Trust Co. held equity amounting to 8.68 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

Having large numbers of these kinds of assets suggests a bank could have to use capital to cover losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, diminishing earnings and increasing the risk of a failure in the future.

Alpine Bank & Trust Co. scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 0.46 percent of Alpine Bank & Trust Co.'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 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the size of that reserve to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Alpine Bank & Trust Co.'s loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand financial shocks. Conversely, losses reduce a bank's ability to do those things.

Alpine Bank & Trust Co. exceeded the national average on Bankrate's earnings test, achieving a score of 24 out of a possible 30.

One important way to measure 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 Alpine Bank & Trust Co. was 15.79 percent, above the national average of 8.10 percent.

The bank earned net income of $17.2 million on total equity of $107.9 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.36 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.