Asset Quality Score
In this test, Bankrate tries to determine the effect of troubled assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.
A bank with a large number of these kinds of assets could eventually be required to use capital to cover losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and elevating the chances of a future failure.
Caldwell Bank & Trust Company scored 24 out of a possible 40 points on Bankrate's asset quality test, below the national average of 37.49.
The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 4.49 percent of Caldwell Bank & Trust Company's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above 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 . How large that reserve is can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Caldwell Bank & Trust Company's loan loss allowance in its most recent filings.