Safe and Sound

Summit Community Bank, Inc

Moorefield, WV
3
Star Rating
Summit Community Bank, Inc is a Moorefield, WV-based, FDIC-insured bank founded in 1995. Regulatory filings show the bank having equity of $206.1 million on $2,088,139,000 in assets, as of June 30, 2017.

With 320 full-time employees in 32 offices in multiple states, the bank holds loans and leases worth $1.54 billion, including real estate loans of $1.29 billion. U.S. bank customers currently have $1.62 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Summit Community Bank, Inc exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three major criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial resilience. It acts as a bulwark against losses and as protection for depositors during periods of economic instability for the bank. From a safety and soundness perspective, the higher the capital, the better.
On our test to measure the adequacy of a bank's capital, Summit Community Bank, Inc received a score of 8 out of a possible 30 points, below the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Summit Community Bank, Inc's Tier 1 capital ratio was 11.64 percent, exceeding the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to financial downturns.

Overall, Summit Community Bank, Inc held equity amounting to 9.87 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 troubled assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these types of assets means a bank may eventually have to use capital to cover losses, reducing its equity buffer. 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, pushing down earnings and increasing the risk of a failure in the future.

Summit Community Bank, Inc finished below the national average of 37.62 on Bankrate's test of asset quality, racking up 32 out of a possible 40 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, 0.88 percent of Summit Community Bank, Inc'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . How large that reserve is can be a widely used 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 Summit Community Bank, Inc's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Banks that are losing money, however, are less able to do those things.

On Bankrate's test of earnings, Summit Community Bank, Inc scored 8 out of a possible 30, less than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for Summit Community Bank, Inc was 4.19 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $3.8 million on total equity of $206.1 million. The bank had an annualized return on average assets, or ROA, of 0.41 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.