Safe and Sound

Brickyard Bank

Lincolnwood, IL
3
Star Rating
Brickyard Bank is a Lincolnwood, IL-based, FDIC-insured bank dating back to 1979. The bank holds equity of $11.8 million on assets of $114.4 million, according to December 31, 2017, regulatory filings.

U.S. bank customers have $102.0 million on deposit at 3 offices in IL run by 22 full-time employees. With that footprint, the bank has amassed loans and leases worth $79.5 million, including $68.9 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, Brickyard Bank exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three major criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for account holders when a bank is experiencing economic instability. It follows then that when it comes to measuring an an institution's financial stability, capital is useful. From a safety and soundness perspective, the more capital, the better.

Brickyard Bank came in below the national average of 13.13 on our test to measure the adequacy of a bank's capital, scoring 12 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Brickyard Bank's Tier 1 capital ratio was 15.38 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial difficulties.

Overall, Brickyard Bank held equity amounting to 10.32 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

A bank with large numbers of these kinds of assets may eventually be required 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 thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

Brickyard Bank scored 24 out of a possible 40 points on Bankrate's asset quality test, lower than the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 0.68 percent of Brickyard 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 keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a useful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Brickyard Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the bank better able to withstand financial trouble. Losses, on the other hand, reduce a bank's ability to do those things.

Brickyard Bank received below-average marks on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Brickyard Bank was 5.03 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $503,000 on total equity of $11.8 million. The bank experienced an annualized return on average assets, or ROA, of 0.46 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.