Safe and Sound

Atlantic Capital Bank, National Association

Chattanooga, TN
3
Star Rating
Atlantic Capital Bank, National Association is a Chattanooga, TN-based, FDIC-insured bank dating back to 2000. Regulatory filings show the bank having equity of $344.2 million on $2.89 billion in assets, as of December 31, 2017.

Thanks to the work of 348 full-time employees in 19 offices in multiple states, the bank currently holds loans and leases worth $1.92 billion, including $1.24 billion worth of real estate loans. U.S. bank customers currently have $2.46 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Atlantic Capital Bank, National Association exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of a bank's financial resilience. It acts as a cushion against losses and provides protection for accountholders when a bank is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

Atlantic Capital Bank, National Association beat out the national average of 13.13 points on our test to measure capital adequacy, scoring 14 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Atlantic Capital Bank, National Association's Tier 1 capital ratio was 12.69 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather economic headwinds.

Overall, Atlantic Capital Bank, National Association held equity amounting to 11.91 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due loans.

Having extensive holdings of these kinds of assets suggests a bank may have to use capital to cover losses, shrinking its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, Atlantic Capital Bank, National Association scored 40 out of a possible 40 points, better 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, 0.15 percent of Atlantic Capital Bank, National Association's loans were noncurrent -- in other words, 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 . That reserve's size can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Atlantic Capital Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

Atlantic Capital Bank, National Association received below-average marks on Bankrate's test of earnings, achieving a score of 0 out of a possible 30.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for Atlantic Capital Bank, National Association was -0.34 percent, below the national average of 8.10 percent.

The bank earned net income of $-1.2 million on total equity of $344.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of -0.04 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.