Safe and Sound

Asheville Savings Bank, S.S.B.

Asheville, NC
3
Star Rating
Asheville, NC-based Asheville Savings Bank, S.S.B. is an FDIC-insured bank started in 1936. As of June 30, 2017, the bank held equity of $90.6 million on $799,846,000 in assets.

U.S. bank customers have $681.0 million on deposit at 13 offices in NC run by 156 full-time employees. With that footprint, the bank has amassed loans and leases worth $611.4 million, including $573.1 million worth of real estate loans.

Overall, Bankrate believes that, as of June 30, 2017, Asheville Savings Bank, S.S.B. exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial strength, capital is important. It acts as a buffer against losses and affords protection for accountholders when a bank is experiencing economic trouble. When looking at safety and soundness, more capital is preferred.
Asheville Savings Bank, S.S.B. did better than the national average of 13.38 points on our test to measure capital adequacy, receiving a score of 14 out of a possible 30 points.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Asheville Savings Bank, S.S.B.'s Tier 1 capital ratio was 15.23 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather financial difficulties.

Overall, Asheville Savings Bank, S.S.B. held equity amounting to 11.32 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

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

A bank with a large number of these kinds of assets may eventually have to use capital to absorb losses, shrinking its equity buffer. 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 elevating the chances of a failure in the future.

Asheville Savings Bank, S.S.B. scored above the national average of 37.62 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 0.09 percent of Asheville Savings Bank, S.S.B.'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 1.04 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . That reserve's size can be a useful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Asheville Savings Bank, S.S.B.'s loan loss allowance was 1,204.16 percent of its total noncurrent loans, exceeding the national average. All else being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand financial trouble. Losses, on the other hand, lessen a bank's ability to do those things.

On Bankrate's earnings test, Asheville Savings Bank, S.S.B. scored 14 out of a possible 30, coming in below the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Asheville Savings Bank, S.S.B. was 7.12 percent, below the national average of 9.28 percent.

The bank recorded net income of $3.1 million on total equity of $90.6 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.79 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.