Safe and Sound

North Shore Bank, FSB

Brookfield, WI
3
Star Rating
Founded in 1923, North Shore Bank, FSB is an FDIC-insured bank headquartered in Brookfield, WI. Regulatory filings show the bank having equity of $236.7 million on $2.04 billion in assets, as of December 31, 2017.

With 468 full-time employees in 49 offices in multiple states, the bank currently holds loans and leases worth $1.48 billion, including real estate loans of $1.14 billion. U.S. bank customers currently have $1.70 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, North Shore Bank, FSB exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three key criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of a bank's financial resilience. It works as a cushion against losses and provides protection for accountholders when a bank is experiencing economic instability. When looking at safety and soundness, the more capital, the better.

North Shore Bank, FSB fell below the national average of 13.13 on our test to measure capital adequacy, scoring 12 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. North Shore Bank, FSB's Tier 1 capital ratio was 16.25 percent, exceeding the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather financial downturns.

Overall, North Shore Bank, FSB held equity amounting to 11.60 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with a large number of these types of assets could eventually have to use capital to cover losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, diminishing earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, North Shore Bank, FSB scored 36 out of a possible 40 points, lower than the national average of 37.49 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.65 percent of North Shore Bank, FSB'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 known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a handy 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 North Shore Bank, FSB's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.

North Shore Bank, FSB scored 6 out of a possible 30 on Bankrate's earnings test, below the national average of 15.12.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. North Shore Bank, FSB's most recent annualized quarterly return on equity was 2.83 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $6.6 million on total equity of $236.7 million. The bank reported an annualized return on average assets, or ROA, of 0.34 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.