Safe and Sound

Doolin Security Savings Bank, FSB

2
Star Rating
Doolin Security Savings Bank, FSB is an FDIC-insured bank started in 1906 and currently based in New Martinsville, WV. The bank holds equity of $4.3 million on $46.9 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 13 full-time employees in 3 offices in WV, the bank holds loans and leases worth $6.7 million, including $5.3 million worth of real estate loans. The bank currently holds $42.2 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Doolin Security Savings Bank, FSB exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three major criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for depositors during periods of economic instability for the bank. It follows then that when it comes to measuring an an institution's financial stability, capital is essential. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, Doolin Security Savings Bank, FSB received a score of 10 out of a possible 30 points, lower than the national average of 13.13.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Doolin Security Savings Bank, FSB's Tier 1 capital ratio was 30.83 percent, exceeding the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic headwinds.

Overall, Doolin Security Savings Bank, FSB held equity amounting to 9.19 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as past-due loans.

A bank with large numbers of these kinds of assets could eventually have to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in lower earnings and potentially more risk of a failure in the future.

Doolin Security Savings Bank, FSB scored above the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.83 percent of Doolin Security Savings Bank, FSB'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 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the size of that reserve to the total amount of at-risk loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Doolin Security Savings Bank, FSB's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

Doolin Security Savings Bank, FSB scored 0 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.

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 Doolin Security Savings Bank, FSB was -16.45 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $-798,000 on total equity of $4.3 million. The bank experienced an annualized return on average assets, or ROA, of -1.70 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.