Asset Quality Score
Bankrate uses this test to estimate the impact of problem assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.
Having a large number of these kinds of assets could eventually force a bank to use capital to cover losses, decreasing 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, decreasing earnings and increasing the chances of a failure in the future.
CIBC Bank USA scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.67.
A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.43 percent of CIBC Bank USA'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 1.24 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 useful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on CIBC Bank USA's loan loss allowance in its most recent filings.