Safe and Sound

Loomis Federal Savings and Loan Association

Chicago, IL
4
Star Rating
Loomis Federal Savings and Loan Association is an FDIC-insured bank started in 1929 and currently headquartered in Chicago, IL. Regulatory filings show the bank having equity of $18.2 million on assets of $72.4 million, as of December 31, 2017.

Thanks to the efforts of 16 full-time employees, the bank currently holds loans and leases worth $22.8 million, including real estate loans of $21.3 million. U.S. bank customers currently have $54.0 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Loomis Federal Savings and Loan Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to grade American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a bank's financial strength. It acts as a bulwark against losses and provides protection for depositors when a bank is struggling financially. When looking at safety and soundness, more capital is preferred.

Loomis Federal Savings and Loan Association did better than the national average of 13.13 points on our test to measure the adequacy of a bank's capital, achieving a score of 30 out of a possible 30 points.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Loomis Federal Savings and Loan Association's Tier 1 capital ratio was 108.92 percent, higher than the 6 percent level regulators consider adequate, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic downturns.

Overall, Loomis Federal Savings and Loan Association held equity amounting to 25.13 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 problem assets, such as unpaid mortgages.

A bank with extensive holdings of these types of assets could eventually be forced to use capital to absorb losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and elevating the chances of a failure in the future.

Loomis Federal Savings and Loan Association fell below the national average of 37.49 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 6.42 percent of Loomis 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 deal with troubled assets known as an "allowance for loan and lease losses." That reserve's size can be a widely used 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 Loomis Federal Savings and Loan Association's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand financial trouble. Banks that are losing money, however, are less able to do those things.

Loomis Federal Savings and Loan Association fell short of the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for Loomis Federal Savings and Loan Association was -0.67 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $-123,000 on total equity of $18.2 million. The bank reported an annualized return on average assets, or ROA, of -0.17 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.