Safe and Sound

Belmont Savings Bank

Bellaire, OH
5
Star Rating
Started in 1886, Belmont Savings Bank is an FDIC-insured bank headquartered in Bellaire, OH. Regulatory filings show the bank having equity of $66.0 million on $415.6 million in assets, as of December 31, 2017.

U.S. bank customers have $301.2 million on deposit at 4 offices in OH run by 56 full-time employees. With that footprint, the bank holds loans and leases worth $69.3 million, $56.3 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, Belmont Savings Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to evaluate American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for account holders during periods of economic trouble for the bank. It follows then that when it comes to measuring an an institution's financial strength, capital is crucial. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a bank's capital, Belmont Savings Bank scored 22 out of a possible 30 points, beating out the national average of 13.13.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Belmont Savings Bank's Tier 1 capital ratio was 62.65 percent, higher than the 6 percent level considered adequate by regulators, and higher than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial downturns.

Overall, Belmont Savings Bank held equity amounting to 15.89 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

Having large numbers of these types of assets may eventually require a bank to use capital to cover losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, pushing down earnings and elevating the risk of a future failure.

Belmont Savings Bank exceeded the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 2.08 percent of Belmont Savings Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 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 problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Belmont Savings Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial trouble. Conversely, losses diminish a bank's ability to do those things.

On Bankrate's earnings test, Belmont Savings Bank scored 12 out of a possible 30, lower than the national average of 15.12.

One important way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. Belmont Savings Bank's most recent annualized quarterly return on equity was 5.40 percent, below the national average of 8.10 percent.

The bank earned net income of $3.5 million on total equity of $66.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.80 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.