Safe and Sound

Auburn Savings Bank, FSB

Auburn, ME
4
Star Rating
Auburn, ME-based Auburn Savings Bank, FSB is an FDIC-insured bank founded in 1887. The bank holds equity of $6.5 million on $70,793,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the work of 16 full-time employees in 2 offices in ME, the bank holds loans and leases worth $60.2 million, including real estate loans of $57.8 million. The bank currently holds $53.3 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Auburn Savings Bank, FSB exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank faired on the three important criteria Bankrate used to grade U.S. banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is valuable. It works as a cushion against losses and provides protection for accountholders when a bank is struggling financially. When looking at safety and soundness, the higher the capital, the better.
Auburn Savings Bank, FSB received a score of 10 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 13.38.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Auburn Savings Bank, FSB's Tier 1 capital ratio was 15.46 percent, higher than the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial challenges.

Overall, Auburn Savings Bank, FSB held equity amounting to 9.25 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the effect 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 required to use capital to absorb losses, decreasing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, diminishing earnings and elevating the risk of a future failure.

Auburn Savings Bank, FSB came in below the national average of 37.62 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 1.09 percent of Auburn Savings Bank, FSB'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 1.04 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the that reserve's size to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Auburn Savings Bank, FSB's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, boosting 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, Auburn Savings Bank, FSB scored 12 out of a possible 30, falling short of the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Auburn Savings Bank, FSB's most recent annualized quarterly return on equity was 5.90 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $190,000 on total equity of $6.5 million. The bank reported an annualized return on average assets, or ROA, of 0.54 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.