Safe and Sound

Blue Ridge Bank and Trust Co.

Independence, MO
4
Star Rating
Independence, MO-based Blue Ridge Bank and Trust Co. is an FDIC-insured bank started in 1958. As of June 30, 2017, the bank had equity of $48.4 million on assets of $521.0 million.

With 134 full-time employees in 9 offices in MO, the bank holds loans and leases worth $376.9 million, including real estate loans of $254.3 million. U.S. bank customers currently have $461.8 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Blue Ridge Bank and Trust Co. 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 American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial resilience. It works as a cushion against losses and as protection for depositors during periods of financial instability for the bank. When it comes to safety and soundness, the more capital, the better.
On our test to measure capital adequacy, Blue Ridge Bank and Trust Co. received a score of 10 out of a possible 30 points, failing to reach the national average of 13.38.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Blue Ridge Bank and Trust Co.'s Tier 1 capital ratio was 11.45 percent, above the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather financial downturns.

Overall, Blue Ridge Bank and Trust Co. held equity amounting to 9.28 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 effect of problem assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with extensive holdings of these kinds of assets could eventually be forced to use capital to absorb 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 increasing the chances of a future failure.

Blue Ridge Bank and Trust Co. did better than the national average of 37.62 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.63 percent of Blue Ridge Bank and Trust Co.'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 keep a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing the how large that reserve is to the total amount of at-risk loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Blue Ridge Bank and Trust Co.'s loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Obviously, banks that are losing money are less able to do those things.

On Bankrate's earnings test, Blue Ridge Bank and Trust Co. scored 18 out of a possible 30, exceeding the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for Blue Ridge Bank and Trust Co. was 10.11 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $2.4 million on total equity of $48.4 million. The bank experienced an annualized return on average assets, or ROA, of 0.92 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.