Safe and Sound

Abbeville First Bank, SSB

Abbeville, SC
5
Star Rating
Started in 1907, Abbeville First Bank, SSB is an FDIC-insured bank based in Abbeville, SC. Regulatory filings show the bank having equity of $9.3 million on assets of $77.7 million, as of December 31, 2017.

U.S. bank customers have $57.1 million on deposit at 2 offices in SC run by 19 full-time employees. With that footprint, the bank currently holds loans and leases worth $46.2 million, including real estate loans of $44.7 million.

Overall, Bankrate believes that, as of December 31, 2017, Abbeville First Bank, SSB exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank fared on the three major criteria Bankrate used to score American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a bank's financial fortitude. It works as a cushion against losses and provides protection for depositors when a bank is experiencing economic trouble. From a safety and soundness perspective, more capital is preferred.

Abbeville First Bank, SSB scored 14 out of a possible 30 points on our test to measure capital adequacy, above the national average of 13.13.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Abbeville First Bank, SSB's Tier 1 capital ratio was 23.14 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic downturns.

Overall, Abbeville First Bank, SSB held equity amounting to 11.96 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as past-due loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these types of assets means a bank may have to use capital to absorb losses, cutting down on 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 money, decreasing earnings and increasing the chances of a failure in the future.

On Bankrate's test of asset quality, Abbeville First Bank, SSB scored 40 out of a possible 40 points, beating the national average of 37.49 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.15 percent of Abbeville First Bank, SSB'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 1.01 percent.

Banks maintain a reserve to handle troubled assets known as an "allowance for loan and lease losses." Comparing how large that reserve is to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Abbeville First Bank, SSB's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.

On Bankrate's earnings test, Abbeville First Bank, SSB scored 20 out of a possible 30, beating the national average of 15.12.

One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. The most recent annualized quarterly return on equity for Abbeville First Bank, SSB was 11.03 percent, above the national average of 8.10 percent.

The bank recorded net income of $955,000 on total equity of $9.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.24 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 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.