Safe and Sound

American Trust & Savings Bank

Dubuque, IA
4
Star Rating
Founded in 1905, American Trust & Savings Bank is an FDIC-insured bank headquartered in Dubuque, IA. The bank holds equity of $122.4 million on $1.16 billion in assets, according to December 31, 2017, regulatory filings.

U.S. bank customers have $942.3 million on deposit at 11 offices in IA run by 308 full-time employees. With that footprint, the bank has amassed loans and leases worth $950.7 million, including $594.5 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, American Trust & Savings 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 evaluate U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial resilience, capital is crucial. It acts as a bulwark against losses and affords protection for accountholders when a bank is experiencing economic instability. When it comes to safety and soundness, more capital is preferred.

American Trust & Savings Bank received a score of 12 out of a possible 30 points on our test to measure the adequacy of a bank's capital, coming in below the national average of 13.13.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. American Trust & Savings Bank's Tier 1 capital ratio was 11.17 percent, higher than the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to financial challenges.

Overall, American Trust & Savings Bank held equity amounting to 10.58 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

A bank with large numbers of these kinds of assets could eventually have 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 no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

American Trust & Savings Bank scored 40 out of a possible 40 points on Bankrate's asset quality test, better than the national average of 37.49.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.34 percent of American Trust & Savings 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 1.01 percent.

Banks maintain 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 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 Trust & Savings Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on 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, likely making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.

On Bankrate's earnings test, American Trust & Savings Bank scored 14 out of a possible 30, lower than the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important measure of a bank's earnings. American Trust & Savings Bank's most recent annualized quarterly return on equity was 6.88 percent, below the national average of 8.10 percent.

The bank earned net income of $8.3 million on total equity of $122.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.74 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.