Safe and Sound

Schaumburg Bank & Trust Company, National Association

Schaumburg, IL
4
Star Rating
Schaumburg, IL-based Schaumburg Bank & Trust Company, National Association is an FDIC-insured bank started in 2001. As of December 31, 2017, the bank had equity of $120.7 million on $1.04 billion in assets.

With 63 full-time employees in 8 offices in IL, the bank currently holds loans and leases worth $804.4 million, including real estate loans of $335.5 million. U.S. bank customers currently have $880.5 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Schaumburg Bank & Trust Company, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three major criteria Bankrate used to evaluate American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial stability, capital is essential. It works as a bulwark against losses and as protection for accountholders when a bank is experiencing financial trouble. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, Schaumburg Bank & Trust Company, National Association received a score of 12 out of a possible 30 points, coming in below the national average of 13.13.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Schaumburg Bank & Trust Company, National Association's Tier 1 capital ratio was 11.28 percent, exceeding the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic difficulties.

Overall, Schaumburg Bank & Trust Company, National Association held equity amounting to 11.56 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as past-due loans.

A bank with large numbers of these types of assets could eventually be forced to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, reducing earnings and increasing the risk of a future failure.

Schaumburg Bank & Trust Company, National Association scored 36 out of a possible 40 points on Bankrate's test of asset quality, below the national average of 37.49.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.98 percent of Schaumburg Bank & Trust Company, National Association'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 troubled 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 problematic loans. Unfortunately, the FDIC did not provide information on Schaumburg Bank & Trust Company, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money are less able to do those things.

Schaumburg Bank & Trust Company, National Association scored 14 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Schaumburg Bank & Trust Company, National Association was 6.87 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $8.2 million on total equity of $120.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.77 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.