Asset Quality Score
In this test, Bankrate tries to estimate the impact of problem assets, such as past-due loans, on the bank's capitalization and allocated loan loss reserves.
Having a large number of these types of assets suggests a bank could have to use capital to absorb losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, decreasing earnings and elevating the risk of a failure in the future.
On Bankrate's asset quality test, Dearborn Federal Savings Bank scored 40 out of a possible 40 points, better than the national average of 37.49 points.
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, 0.44 percent of Dearborn Federal Savings Bank'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 to deal with problem assets known as an "allowance for loan and lease losses." That reserve's size can be a widely used 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 Dearborn Federal Savings Bank's loan loss allowance in its most recent filings.