Safe and Sound

Axiom Bank, National Association

Maitland, FL
4
Star Rating
Axiom Bank, National Association is a Maitland, FL-based, FDIC-insured bank that opened its doors in 1962. As of December 31, 2017, the bank had equity of $97.6 million on $560.0 million in assets.

Thanks to the work of 183 full-time employees in 24 offices in FL, the bank has amassed loans and leases worth $455.4 million, $443.3 million of which are for real estate. U.S. bank customers currently have $427.5 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Axiom Bank, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three key criteria Bankrate used to score U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for account holders during times of financial instability for the bank. Therefore, when it comes to measuring an an institution's financial stability, capital is key. When it comes to safety and soundness, more capital is preferred.

Axiom Bank, National Association beat out the national average of 13.13 points on our test to measure the adequacy of a bank's capital, achieving a score of 26 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Axiom Bank, National Association's Tier 1 capital ratio was 23.41 percent, exceeding the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial difficulties.

Overall, Axiom Bank, National Association held equity amounting to 17.42 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

Having a large number of these types of assets means a bank could have to use capital to cover losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in diminished earnings and potentially more risk of a future failure.

Axiom Bank, National Association scored 36 out of a possible 40 points on Bankrate's asset quality test, coming in below the national average of 37.49.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.85 percent of Axiom Bank, National Association's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks maintain a reserve to handle problem 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 widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Axiom Bank, National 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, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand financial shocks. Losses, on the other hand, reduce a bank's ability to do those things.

Axiom Bank, National Association scored 2 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Axiom Bank, National Association's most recent annualized quarterly return on equity was 0.90 percent, below the national average of 8.10 percent.

The bank earned net income of $880,000 on total equity of $97.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.16 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.