Safe and Sound

National Advisors Trust Company

Kansas City, MO
5
Star Rating
National Advisors Trust Company is a Kansas City, MO-based, FDIC-insured bank founded in 2001. Regulatory filings show the bank having equity of $7.7 million on assets of $9.8 million, as of December 31, 2017.

Thanks to the efforts of 70 full-time employees in 2 offices in multiple states, the bank has amassed loans and leases worth $0, including $0 worth of real estate loans. The bank currently holds $500,000 in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, National Advisors Trust Company exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank did on the three key criteria Bankrate used to evaluate U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for depositors when a bank is experiencing economic instability. It follows then that when it comes to measuring an an institution's financial resilience, capital is key. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, National Advisors Trust Company scored 30 out of a possible 30 points, above the national average of 13.13.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. National Advisors Trust Company's Tier 1 capital ratio was 217.70 percent, exceeding the 6 percent level regulators consider adequate, and above the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic challenges.

Overall, National Advisors Trust Company held equity amounting to 78.97 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

Having a large number of these types of assets suggests a bank could eventually have to use capital to absorb losses, diminishing 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 failure in the future.

National Advisors Trust Company exceeded the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.

Banks maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on National Advisors Trust Company'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, giving a boost to its capital buffer, or use them to address problematic loans, likely making the bank better able to withstand economic trouble. Conversely, losses take away from a bank's ability to do those things.

National Advisors Trust Company outperformed the average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.

One key way to measure 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 National Advisors Trust Company was 11.57 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $861,000 on total equity of $7.7 million. The bank experienced an annualized return on average assets, or ROA, of 9.49 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.