Safe and Sound

The State Savings Bank of Manistique

Manistique, MI
4
Star Rating
The State Savings Bank of Manistique is a Manistique, MI-based, FDIC-insured bank founded in 1917. As of December 31, 2017, the bank held equity of $13.9 million on assets of $124.7 million.

Thanks to the work of 27 full-time employees in 4 offices in MI, the bank holds loans and leases worth $58.5 million, $39.8 million of which are for real estate. U.S. bank customers currently have $105.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The State Savings Bank of Manistique exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a bank's financial resilience. It works as a bulwark against losses and provides protection for accountholders when a bank is experiencing financial trouble. From a safety and soundness perspective, more capital is better.

On our test to measure capital adequacy, The State Savings Bank of Manistique achieved a score of 14 out of a possible 30 points, exceeding the national average of 13.13.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. The State Savings Bank of Manistique's Tier 1 capital ratio was 17.25 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 weather financial headwinds.

Overall, The State Savings Bank of Manistique held equity amounting to 11.14 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 reserves set aside to cover loan losses, as well as overall capitalization, could be affected by problem assets, such as past-due loans.

Having a large number of these kinds of assets means a bank could eventually have to use capital to cover 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, decreasing earnings and elevating the risk of a future failure.

The State Savings Bank of Manistique came in below the national average of 37.49 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

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, 1.40 percent of The State Savings Bank of Manistique'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . How large that reserve is can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on The State Savings Bank of Manistique's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand financial shocks. Obviously, banks that are losing money are less able to do those things.

The State Savings Bank of Manistique received below-average marks on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for The State Savings Bank of Manistique was 5.17 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $732,000 on total equity of $13.9 million. The bank had an annualized return on average assets, or ROA, of 0.59 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.