Safe and Sound

Anchor D Bank

Texhoma, OK
5
Star Rating
Anchor D Bank is an FDIC-insured bank started in 1906 and currently headquartered in Texhoma, OK. Regulatory filings show the bank having equity of $20.4 million on assets of $142.0 million, as of December 31, 2017.

Thanks to the efforts of 48 full-time employees in 3 offices in OK, the bank holds loans and leases worth $107.9 million, including real estate loans of $50.4 million. The bank currently holds $114.8 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Anchor D Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to evaluate U.S. banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial strength. It works as a bulwark against losses and affords protection for depositors when a bank is experiencing financial instability. When looking at safety and soundness, the more capital, the better.

On our test to measure the adequacy of a bank's capital, Anchor D Bank scored 20 out of a possible 30 points, beating out the national average of 13.13.

One important measure of this buffer is a bank's Tier 1 capital ratio. Anchor D Bank's Tier 1 capital ratio was 17.33 percent, exceeding the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to financial headwinds.

Overall, Anchor D Bank held equity amounting to 14.36 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as unpaid loans.

Having lots of these kinds of assets means a bank could eventually have to use capital to cover losses, shrinking its equity cushion. 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 reduced earnings and potentially more risk of a failure in the future.

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

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, 0.07 percent of Anchor D 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 troubled assets . The size of that reserve can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Anchor D Bank's loan loss allowance was 2,444.44 percent of its total noncurrent loans, higher than the national average. All things being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand economic shocks. Obviously, banks that are losing money are less able to do those things.

On Bankrate's earnings test, Anchor D Bank scored 22 out of a possible 30, above the national average of 15.12.

One important measure of 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 Anchor D Bank was 12.39 percent, above the national average of 8.10 percent.

The bank reported net income of $2.5 million on total equity of $20.4 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.67 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.