Asset Quality Score
Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.
A bank with lots of these types of assets could eventually be forced to use capital to cover losses, decreasing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, diminishing earnings and elevating the chances of a failure in the future.
On Bankrate's test of asset quality, Woodlands Bank scored 36 out of a possible 40 points, coming in below the national average of 37.49 points.
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, 1.26 percent of Woodlands Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.
Banks keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." The size of that reserve can be a useful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Woodlands Bank's loan loss allowance in its most recent filings.