Asset Quality Score
In this test, Bankrate tries to determine the impact of troubled assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.
Having extensive holdings of these kinds of assets means a bank may have to use capital to cover losses, cutting down on its cushion of equity. 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 elevating the chances of a future failure.
Plattsmouth State Bank scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 37.49.
The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 0.02 percent of Plattsmouth State Bank'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 1.01 percent.
Banks maintain 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 problem loans. Plattsmouth State Bank's loan loss allowance was 8,477.78 percent of its total noncurrent loans, exceeding the national average. All things being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.