Safe and Sound

Maspeth Federal Savings and Loan Association

Maspeth, NY
5
Star Rating
Maspeth, NY-based Maspeth Federal Savings and Loan Association is an FDIC-insured bank founded in 1947. The bank holds equity of $595.0 million on assets of $1.81 billion, according to December 31, 2017, regulatory filings.

With 206 full-time employees in 6 offices in NY, the bank holds loans and leases worth $1.67 billion, including real estate loans of $1.69 billion. U.S. bank customers currently have $1.19 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Maspeth Federal 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 fared on the three key criteria Bankrate used to evaluate American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial strength, capital is important. It acts as a buffer against losses and as protection for accountholders during periods of financial trouble for the bank. When looking at safety and soundness, the more capital, the better.

Maspeth Federal Savings and Loan Association achieved a score of 30 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 13.13.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Maspeth Federal Savings and Loan Association's Tier 1 capital ratio was 41.25 percent, higher than 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 weather financial difficulties.

Overall, Maspeth Federal Savings and Loan Association held equity amounting to 32.93 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

A bank with extensive holdings of these kinds of assets could eventually be forced to use capital to absorb losses, decreasing 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 depressed earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, Maspeth Federal Savings and Loan Association scored 36 out of a possible 40 points, less than the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 2.86 percent of Maspeth Federal 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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the size of that reserve to the total amount of problem loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Maspeth Federal Savings and Loan Association's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.

Maspeth Federal Savings and Loan Association did below-average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for Maspeth Federal Savings and Loan Association was 2.84 percent, below the national average of 8.10 percent.

The bank recorded net income of $16.7 million on total equity of $595.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.93 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.