Asset Quality Score
Bankrate uses this test to estimate the effect of problem assets, such as past-due loans, on the bank's capitalization and allocated loan loss reserves.
A bank with large numbers of these kinds of assets may eventually be required to use capital to absorb losses, decreasing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, resulting in lower earnings and potentially more risk of a failure in the future.
The Miners National Bank of Eveleth scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 37.49.
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, 0.07 percent of The Miners National Bank of Eveleth'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 maintain 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 problem loans. The Miners National Bank of Eveleth's loan loss allowance was 1,278.95 percent of its total noncurrent loans, exceeding the national average. All else being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.