Safe and Sound

Ameriprise National Trust Bank

Minneapolis, MN
5
Star Rating
Minneapolis, MN-based Ameriprise National Trust Bank is an FDIC-insured bank started in 2006. As of December 31, 2017, the bank had equity of $22.5 million on assets of $25.0 million.

Thanks to the efforts of 24 full-time employees, the bank has amassed loans and leases worth $0, including real estate loans of $0. The bank currently holds $500,000 in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Ameriprise National Trust Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three key criteria Bankrate used to score American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for depositors when a bank is struggling financially. It follows then that when it comes to measuring an an institution's financial stability, capital is essential. From a safety and soundness perspective, more capital is preferred.

Ameriprise National Trust Bank achieved a score of 30 out of a possible 30 points on our test to measure capital adequacy, above the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Ameriprise National Trust Bank's Tier 1 capital ratio was 375.84 percent, above the 6 percent level considered adequate by regulators, and above the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, Ameriprise National Trust Bank held equity amounting to 90.19 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 troubled assets, such as unpaid mortgages, on the bank's capitalization and allocated loan loss reserves.

Having extensive holdings of these kinds of assets could eventually force a bank to use capital to absorb losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, pushing down earnings and elevating the chances of a failure in the future.

Ameriprise National Trust Bank exceeded the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets.

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

Earnings score

A bank's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.

Ameriprise National Trust Bank scored 4 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. Ameriprise National Trust Bank's most recent annualized quarterly return on equity was 1.16 percent, below the national average of 8.10 percent.

The bank reported net income of $261,000 on total equity of $22.5 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.07 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.