Safe and Sound

Bay-Vanguard Federal Savings Bank

Baltimore, MD
3
Star Rating
Bay-Vanguard Federal Savings Bank is an FDIC-insured bank started in 1873 and currently based in Baltimore, MD. The bank holds equity of $20.5 million on assets of $168.2 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 38 full-time employees in 4 offices in MD, the bank has amassed loans and leases worth $125.3 million, including $109.5 million worth of real estate loans. U.S. bank customers currently have $142.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Bay-Vanguard Federal Savings Bank exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three important criteria Bankrate used to score 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 crucial. It works as a bulwark against losses and affords protection for accountholders when a bank is struggling financially. When it comes to safety and soundness, the more capital, the better.

Bay-Vanguard Federal Savings Bank exceeded the national average of 13.13 points on our test to measure capital adequacy, racking up 16 out of a possible 30 points.

One important measure of this buffer is a bank's Tier 1 capital ratio. Bay-Vanguard Federal Savings Bank's Tier 1 capital ratio was 19.50 percent, above the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic downturns.

Overall, Bay-Vanguard Federal Savings Bank held equity amounting to 12.18 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 loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

A bank with extensive holdings of these kinds of assets may eventually be forced to use capital to cover losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, diminishing earnings and increasing the chances of a future failure.

On Bankrate's test of asset quality, Bay-Vanguard Federal Savings Bank scored 36 out of a possible 40 points, below the national average of 37.49 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.88 percent of Bay-Vanguard Federal Savings Bank'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 keep 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 handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Bay-Vanguard Federal Savings Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its long-term survivability. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.

Bay-Vanguard Federal Savings Bank scored 2 out of a possible 30 on Bankrate's test of earnings, below the national average of 15.12.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Bay-Vanguard Federal Savings Bank was 0.99 percent, below the national average of 8.10 percent.

The bank earned net income of $203,000 on total equity of $20.5 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.12 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.