Safe and Sound

The American National Bank of Mount Pleasant

Mount Pleasant, TX
5
Star Rating
Mount Pleasant, TX-based The American National Bank of Mount Pleasant is an FDIC-insured bank founded in 1979. The bank holds equity of $12.3 million on $93.2 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 26 full-time employees, the bank has amassed loans and leases worth $56.5 million, including $32.9 million worth of real estate loans. U.S. bank customers currently have $80.9 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The American National Bank of Mount Pleasant exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three major 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 account holders when a bank is struggling financially. Therefore, a bank's level of capital is an essential measurement of an institution's financial fortitude. When looking at safety and soundness, the more capital, the better.

On our test to measure the adequacy of a bank's capital, The American National Bank of Mount Pleasant racked up 18 out of a possible 30 points, beating out the national average of 13.13.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. The American National Bank of Mount Pleasant's Tier 1 capital ratio was 22.18 percent, higher than the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, The American National Bank of Mount Pleasant held equity amounting to 13.22 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with large numbers of these types of assets may eventually have to use capital to cover losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and elevating the risk of a failure in the future.

On Bankrate's test of asset quality, The American National Bank of Mount Pleasant scored 40 out of a possible 40 points, beating out the national average of 37.49 points.

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, 0.23 percent of The American National Bank of Mount Pleasant'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 handle troubled assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of at-risk loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on The American National Bank of Mount Pleasant's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the bank better prepared to withstand economic trouble. Losses, on the other hand, take away from a bank's ability to do those things.

On Bankrate's earnings test, The American National Bank of Mount Pleasant scored 22 out of a possible 30, above the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The American National Bank of Mount Pleasant's most recent annualized quarterly return on equity was 12.81 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $1.5 million on total equity of $12.3 million. The bank reported an annualized return on average assets, or ROA, of 1.63 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.