Safe and Sound

Home Savings Bank of Wapakoneta

Wapakoneta, OH
4
Star Rating
Started in 1941, Home Savings Bank of Wapakoneta is an FDIC-insured bank based in Wapakoneta, OH. The bank holds equity of $4.8 million on $39.8 million in assets, according to December 31, 2017, regulatory filings.

With 6 full-time employees, the bank currently holds loans and leases worth $28.8 million, including real estate loans of $28.8 million. U.S. bank customers currently have $34.2 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Home Savings Bank of Wapakoneta exhibited a good condition, earning 4 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 evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial strength. It works as a buffer against losses and provides protection for depositors during periods of economic instability for the bank. From a safety and soundness perspective, the more capital, the better.

Home Savings Bank of Wapakoneta exceeded the national average of 13.13 points on our test to measure capital adequacy, achieving a score of 14 out of a possible 30 points.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Home Savings Bank of Wapakoneta's Tier 1 capital ratio was 21.40 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 stand up to economic downturns.

Overall, Home Savings Bank of Wapakoneta held equity amounting to 11.99 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with a large number of these kinds of assets may eventually be required to use capital to cover losses, shrinking its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, resulting in reduced earnings and potentially more risk of a future failure.

Home Savings Bank of Wapakoneta scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, none of Home Savings Bank of Wapakoneta'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 known as an "allowance for loan and lease losses" to deal with troubled assets . How large that reserve is can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Home Savings Bank of Wapakoneta's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money are less able to do those things.

On Bankrate's earnings test, Home Savings Bank of Wapakoneta scored 8 out of a possible 30, below the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Home Savings Bank of Wapakoneta was 3.76 percent, below the national average of 8.10 percent.

The bank earned net income of $177,000 on total equity of $4.8 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.47 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.