Safe and Sound

Axiom Bank

Maitland, FL
5
Star Rating
Axiom Bank is an FDIC-insured bank started in 1962 and currently based in Maitland, FL. The bank has equity of $98.4 million on $537,131,000 in assets, according to June 30, 2017, regulatory filings.

With 180 full-time employees in 24 offices in FL, the bank currently holds loans and leases worth $415.9 million, including real estate loans of $416.6 million. U.S. bank customers currently have $404.4 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Axiom Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to grade U.S. banks on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for depositors when a bank is struggling financially. Therefore, a bank's level of capital is a crucial measurement of a bank's financial fortitude. From a safety and soundness perspective, the more capital, the better.
Axiom Bank scored 28 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 13.38.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Axiom Bank's Tier 1 capital ratio was 26.81 percent, higher than the 6 percent level considered adequate by regulators, and exceeding the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather financial difficulties.

Overall, Axiom Bank held equity amounting to 18.32 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid mortgages.

A bank with large numbers of these kinds of assets may eventually be required to use capital to absorb losses, cutting down on 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, resulting in reduced earnings and potentially more risk of a failure in the future.

Axiom Bank scored 36 out of a possible 40 points on Bankrate's asset quality test, failing to reach the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of June 30, 2017, 2.07 percent of Axiom 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 1.04 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the the size of that reserve 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 Axiom Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.

Axiom Bank scored 8 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 16.52.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for Axiom Bank was 3.22 percent, below the national average of 9.28 percent.

The bank reported net income of $1.6 million on total equity of $98.4 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.56 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.