Safe and Sound

Bank of Blue Valley

Overland Park, KS
4
Star Rating
Bank of Blue Valley is an FDIC-insured bank started in 1989 and currently headquartered in Overland Park, KS. Regulatory filings show the bank having equity of $73.5 million on $688,335,000 in assets, as of June 30, 2017.

U.S. bank customers have $559.8 million on deposit at 5 offices in KS run by 112 full-time employees. With that footprint, the bank has amassed loans and leases worth $519.1 million, including real estate loans of $338.9 million.

Overall, Bankrate believes that, as of June 30, 2017, Bank of Blue Valley 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 works as a bulwark against losses and as protection for depositors during periods of financial instability for the bank. It follows then that when it comes to measuring an a bank's financial resilience, capital is useful. When it comes to safety and soundness, the higher the capital, the better.
Bank of Blue Valley scored below the national average of 13.38 on our test to measure capital adequacy, racking up 12 out of a possible 30 points.

One important measure of this buffer is a bank's Tier 1 capital ratio. Bank of Blue Valley's Tier 1 capital ratio was 11.18 percent, above the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to economic downturns.

Overall, Bank of Blue Valley held equity amounting to 10.68 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid loans, on the bank's loan loss reserves and overall capitalization.

Having lots of these kinds of assets may eventually require a bank to use capital to cover losses, cutting down on its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, Bank of Blue Valley scored 36 out of a possible 40 points, falling short of the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, 0.08 percent of Bank of Blue Valley'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 1.04 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the the size of that reserve to the total amount of problematic loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Bank of Blue Valley's loan loss allowance was 1,482.05 percent of its total noncurrent loans, exceeding the national average. All else being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.

Bank of Blue Valley scored 16 out of a possible 30 on Bankrate's test of earnings, less than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Bank of Blue Valley was 7.71 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $2.8 million on total equity of $73.5 million. The bank experienced an annualized return on average assets, or ROA, of 0.82 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 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.