In these troubled times on Wall Street, it is critical to ensure that your association accounts are maintained in a sound and stable banking institution. To help you make sound decisions regarding the short and long term future of your associations assets, we recommend that you pay heed to these three factors in evaluating our, or any bank's, financial condition.

1) Capital Strength
Capital strength is by far the most important measure of a bank's financial condition. Bank regulators define three measures of capital adequacy. The Leverage Ratio is a measurement of capital to assets. The Tier 1 Risk Based Capital and Total Risk Based Capital Ratios are two measurements of capital compared to the risk profile of the bank's assets.

According to banking regulations, a Well Capitalized bank must maintain the following ratios:

• Leverage Ratio at least 5%
• Tier 1 Risk Based Capital Ratio at least 6%
• Total Risk Based Capital Ratio at least 10%

First Associations Bank's Ratios as of 6-30-10 are:
 

• Leverage Ratio 11%
• Tier 1 Risk Based Capital Ratio 53%
• Total Risk Based Capital Ratio 53%

2) Profitability
Profitability is important in maintaining capital strength. Many factors can influence bank profitability. The most influential factors include; the strength of the economy, competition, the interest rate environment, the quality of bank management, and the quality of bank assets. A common measure of a bank's profitability is its Return on Assets. A profitable bank's Return on Assets should exceed 1% under normal circumstances.

First Associations Bank's Return on Assets through 6-30-10 exceeded 1.5%


 

3) Non-Performing Assets
Non-Performing Assets are the primary problem (past due) loans and foreclosed real estate assets that a bank holds. A high volume of non-performing assets typically leads to periods of depressed earnings and high loan losses and the cost of managing these assets represent a significant drain on profitability. Non-Performing Assets as a percent of total assets should not exceed 5%, and Non-Performing Assets as a percent of capital should not exceed 50%.

First Associations Bank does not have any non-performing assets as of 6-30-10.
 

Most banking information is available through the internet. If you are having trouble finding the information on a bank's financial health, call them. Bankers are generally more than willing to discuss their bank's financial conditions.

We are very proud of our bank's performance in these troubling times and welcome any questions that you may have. If there is any information you need to ensure that you are secure in your decision to have First Associations Bank handle your banking needs, please call us. It is important to us that our depositors and the associations they serve know they are secure with First Associations Bank.

But don't take our word for it, see what the professionals have to say at BankRate.com
As one of the Webs leading aggregator of financial rate information, Bankrate's data research is unique in its depth and breadth. By continually surveying over 4,800 financial institutions in all 50 states they provide clear, objective, and unbiased rates to consumers. We at First Associations Bank are extremely proud of our five star (superior) Bankrate rating. So contact us today and let us assist you with all your banking needs.