Asset Quality Score
Bankrate uses this test to estimate the effect of problem assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.
Having lots of these kinds of assets could eventually require a bank to use capital to absorb losses, shrinking 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, resulting in lower earnings and potentially more risk of a future failure.
On Bankrate's test of asset quality, American National Bank of Minnesota scored 32 out of a possible 40 points, less than the national average of 37.49 points.
A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.07 percent of American National Bank of Minnesota'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 maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of at-risk loans can be a useful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on American National Bank of Minnesota's loan loss allowance in its most recent filings.