Safe and Sound

Bank of Rio Vista

Rio Vista, CA
4
Star Rating
Rio Vista, CA-based Bank of Rio Vista is an FDIC-insured bank founded in 1904. The bank has equity of $27.6 million on assets of $221.8 million, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 34 full-time employees in 3 offices in CA, the bank currently holds loans and leases worth $79.6 million, including $51.0 million worth of real estate loans. The bank currently holds $185.7 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Bank of Rio Vista exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank faired on the three important criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for accountholders during periods of economic trouble for the bank. Therefore, when it comes to measuring an an institution's financial stability, capital is valuable. When it comes to safety and soundness, the more capital, the better.
On our test to measure the adequacy of a bank's capital, Bank of Rio Vista scored 16 out of a possible 30 points, beating out the national average of 13.38.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Bank of Rio Vista's Tier 1 capital ratio was 21.32 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather economic difficulties.

Overall, Bank of Rio Vista held equity amounting to 12.44 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets could eventually force a bank to use capital to cover losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, decreasing earnings and increasing the chances of a failure in the future.

Bank of Rio Vista scored above the national average of 37.62 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, none of Bank of Rio Vista's loans were noncurrent, meaning 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 maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." The size of that reserve can be a useful 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 Bank of Rio Vista's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address 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 Rio Vista scored 12 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 16.52.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. The most recent annualized quarterly return on equity for Bank of Rio Vista was 5.20 percent, below the national average of 9.28 percent.

The bank reported net income of $693,000 on total equity of $27.6 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.63 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.