Safe and Sound

United Fidelity Bank, fsb

Evansville, IN
5
Star Rating
United Fidelity Bank, fsb is an Evansville, IN-based, FDIC-insured bank that opened its doors in 1931. The bank holds equity of $83.8 million on $683.7 million in assets, according to December 31, 2017, regulatory filings.

U.S. bank customers have $536.8 million on deposit at 16 offices in multiple states run by 161 full-time employees. With that footprint, the bank has amassed loans and leases worth $158.5 million, $134.2 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, United Fidelity Bank, fsb exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three important criteria Bankrate used to evaluate U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for depositors during times of financial instability for the bank. Therefore, when it comes to measuring an a bank's financial stability, capital is valuable. When it comes to safety and soundness, more capital is better.

United Fidelity Bank, fsb exceeded the national average of 13.13 points on our test to measure capital adequacy, achieving a score of 14 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. United Fidelity Bank, fsb's Tier 1 capital ratio was 24.97 percent, higher than the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic headwinds.

Overall, United Fidelity Bank, fsb held equity amounting to 12.25 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due mortgages.

A bank with large numbers of these types of assets could eventually have to use capital to absorb losses, decreasing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and elevating the risk of a future failure.

United Fidelity Bank, fsb scored 36 out of a possible 40 points on Bankrate's test of asset quality, falling short of the national average of 37.49.

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, 2.98 percent of United Fidelity Bank, fsb'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 to handle problem assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on United Fidelity Bank, fsb's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

On Bankrate's earnings test, United Fidelity Bank, fsb scored 26 out of a possible 30, beating the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important measure of a bank's earnings. United Fidelity Bank, fsb's most recent annualized quarterly return on equity was 21.46 percent, above the national average of 8.10 percent.

The bank reported net income of $14.8 million on total equity of $83.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 2.53 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.