Safe and Sound

Gouverneur Savings and Loan Association

Gouverneur, NY
5
Star Rating
Gouverneur, NY-based Gouverneur Savings and Loan Association is an FDIC-insured bank started in 1892. The bank has equity of $29.8 million on assets of $134.5 million, according to December 31, 2017, regulatory filings.

With 34 full-time employees in 2 offices in NY, the bank currently holds loans and leases worth $99.2 million, including real estate loans of $94.6 million. U.S. bank customers currently have $84.2 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Gouverneur Savings and Loan Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the bank did on the three key criteria Bankrate used to grade U.S. banks on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for depositors during periods of economic instability for the bank. It follows then that a bank's level of capital is a key measurement of an institution's financial resilience. When it comes to safety and soundness, the more capital, the better.

Gouverneur Savings and Loan Association racked up 30 out of a possible 30 points on our test to measure capital adequacy, above the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Gouverneur Savings and Loan Association's Tier 1 capital ratio was 35.39 percent, above the 6 percent level considered adequate by regulators, and above the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather economic downturns.

Overall, Gouverneur Savings and Loan Association held equity amounting to 22.15 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

A bank with large numbers of these types of assets may eventually have to use capital to cover losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, pushing down earnings and elevating the risk of a future failure.

Gouverneur Savings and Loan Association scored 40 out of a possible 40 points on Bankrate's test of asset quality, above the national average of 37.49.

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, 1.16 percent of Gouverneur Savings and Loan 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 deal with problem assets known as an "allowance for loan and lease losses." The size of that reserve can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Gouverneur Savings and Loan Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, potentially making the bank better able to withstand economic trouble. However, banks that are losing money have less ability to do those things.

On Bankrate's test of earnings, Gouverneur Savings and Loan Association scored 6 out of a possible 30, lower than the national average of 15.12.

One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Gouverneur Savings and Loan Association's most recent annualized quarterly return on equity was 2.86 percent, below the national average of 8.10 percent.

The bank recorded net income of $853,000 on total equity of $29.8 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.62 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.