Safe and Sound

Illinois-Service Federal Savings and Loan Association

2
Star Rating
Illinois-Service Federal Savings and Loan Association is a Chicago, IL-based, FDIC-insured bank founded in 1934. As of December 31, 2017, the bank held equity of $13.3 million on assets of $133.1 million.

U.S. bank customers have $119.8 million on deposit at 2 offices in IL run by 21 full-time employees. With that footprint, the bank currently holds loans and leases worth $62.2 million, including $61.7 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, Illinois-Service Federal Savings and Loan Association exhibited a below-average condition, earning 2 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 American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial fortitude, capital is valuable. It acts as a bulwark against losses and affords protection for accountholders during periods of economic instability for the bank. From a safety and soundness perspective, the higher the capital, the better.

Illinois-Service Federal Savings and Loan Association scored below the national average of 13.13 on our test to measure the adequacy of a bank's capital, racking up 10 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. Illinois-Service Federal Savings and Loan Association's Tier 1 capital ratio was 18.59 percent, higher than the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather economic downturns.

Overall, Illinois-Service Federal Savings and Loan Association held equity amounting to 9.99 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid loans.

A bank with extensive holdings of these kinds of assets may eventually have to use capital to absorb losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, Illinois-Service Federal Savings and Loan Association scored 32 out of a possible 40 points, coming in below the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 3.54 percent of Illinois-Service Federal Savings and Loan Association's loans were noncurrent -- in other words, 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 keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of problem loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Illinois-Service Federal Savings and Loan Association's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to address problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.

Illinois-Service Federal Savings and Loan Association scored 2 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.

One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Illinois-Service Federal Savings and Loan Association's most recent annualized quarterly return on equity was 0.10 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $11,000 on total equity of $13.3 million. The bank had an annualized return on average assets, or ROA, of 0.01 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.