Safe and Sound

Medina Savings and Loan Association

Medina, NY
3
Star Rating
Started in 1851, Medina Savings and Loan Association is an FDIC-insured bank based in Medina, NY. As of December 31, 2017, the bank held equity of $3.7 million on assets of $53.9 million.

U.S. bank customers have $49.5 million on deposit at 2 offices in NY run by 15 full-time employees. With that footprint, the bank currently holds loans and leases worth $26.6 million, including real estate loans of $25.9 million.

Overall, Bankrate believes that, as of December 31, 2017, Medina Savings and Loan Association exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three important criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial fortitude. It works as a buffer against losses and provides protection for accountholders when a bank is struggling financially. From a safety and soundness perspective, the higher the capital, the better.

Medina Savings and Loan Association scored below the national average of 13.13 on our test to measure capital adequacy, achieving a score of 4 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. Medina Savings and Loan Association's Tier 1 capital ratio was 19.76 percent, exceeding the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather financial headwinds.

Overall, Medina Savings and Loan Association held equity amounting to 6.90 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by problem assets, such as past-due loans.

A bank with a large number of these types of assets may eventually have to use capital to absorb losses, decreasing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in depressed earnings and potentially more risk of a future failure.

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

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.37 percent of Medina 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 below 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." Comparing the size of that reserve to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Medina Savings and Loan Association's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand economic trouble. Conversely, losses take away from a bank's ability to do those things.

Medina Savings and Loan Association fell short of the national average on Bankrate's test of earnings, achieving a score of 2 out of a possible 30.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. Medina Savings and Loan Association's most recent annualized quarterly return on equity was 0.95 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $34,000 on total equity of $3.7 million. The bank reported an annualized return on average assets, or ROA, of 0.06 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.