Safe and Sound

Amory Federal Savings and Loan Association

Amory, MS
4
Star Rating
Amory, MS-based Amory Federal Savings and Loan Association is an FDIC-insured bank started in 1934. As of June 30, 2017, the bank held equity of $10.9 million on $86,468,000 in assets.

With 11 full-time employees, the bank currently holds loans and leases worth $64.8 million, including real estate loans of $64.4 million. U.S. bank customers currently have $75.3 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Amory Federal Savings and Loan 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 grade American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial fortitude. It acts as a cushion against losses and as protection for depositors during times of economic trouble for the bank. When it comes to safety and soundness, more capital is preferred.
On our test to measure capital adequacy, Amory Federal Savings and Loan Association scored 16 out of a possible 30 points, above the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Amory Federal Savings and Loan Association's Tier 1 capital ratio was 25.92 percent, exceeding the 6 percent level regulators consider adequate, and higher than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather financial challenges.

Overall, Amory Federal Savings and Loan Association held equity amounting to 12.60 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

Having lots of these kinds of assets could eventually require a bank to use capital to absorb losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, diminishing earnings and elevating the risk of a failure in the future.

Amory Federal Savings and Loan Association scored below the national average of 37.62 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 1.03 percent of Amory Federal Savings and Loan 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 1.04 percent.

Banks maintain a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing the the size of that reserve to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Amory Federal Savings and Loan Association's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.

On Bankrate's earnings test, Amory Federal Savings and Loan Association scored 8 out of a possible 30, less than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for Amory Federal Savings and Loan Association was 3.37 percent, below the national average of 9.28 percent.

The bank recorded net income of $182,000 on total equity of $10.9 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.42 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 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.