Security Savings Bank
Security Savings Bank is a Monmouth, IL-based, FDIC-insured bank started in 1882. As of December 31, 2017, the bank held equity of $19.7 million on $189.6 million in assets.
With 35 full-time employees in 2 offices in IL, the bank has amassed loans and leases worth $130.2 million, including real estate loans of $76.5 million. U.S. bank customers currently have $169.2 million in deposits with the bank.
Overall, Bankrate believes that, as of December 31, 2017, Security Savings Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three major criteria Bankrate used to evaluate American banks.
SAFE AND SOUND?
THE INSTITUTION'S SCORE
Capital Score
When it comes to measuring an a bank's financial strength, capital is essential. It works as a buffer against losses and affords protection for depositors when a bank is struggling financially. When it comes to safety and soundness, more capital is better.
Security Savings Bank finished below the national average of 13.13 on our test to measure the adequacy of a bank's capital, receiving a score of 12 out of a possible 30 points.
A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Security Savings Bank's Tier 1 capital ratio was 14.96 percent, higher than the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather economic headwinds.
Overall, Security Savings Bank held equity amounting to 10.41 percent of its assets, which was lower than the national average of 12.03 percent.
Asset Quality Score
This test's purpose is to estimate how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.
A bank with large numbers of these kinds of assets could eventually have to use capital to cover losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and elevating the chances of a future failure.
Security Savings Bank scored 40 out of a possible 40 points on Bankrate's asset quality test, better than the national average of 37.49.
The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 0.55 percent of Security Savings 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 keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing how large that reserve is to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Security Savings Bank's loan loss allowance in its most recent filings.
Earnings score
A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.
Security Savings Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Security Savings Bank's most recent annualized quarterly return on equity was 3.74 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $729,000 on total equity of $19.7 million. The bank reported an annualized return on average assets, or ROA, of 0.39 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.