Safe and Sound

Benchmark Bank

Gahanna, OH
4
Star Rating
Benchmark Bank is a Gahanna, OH-based, FDIC-insured bank founded in 2005. Regulatory filings show the bank having equity of $17.2 million on $124,363,000 in assets, as of June 30, 2017.

U.S. bank customers have $98.6 million on deposit at 2 offices in OH run by 58 full-time employees. With that footprint, the bank has amassed loans and leases worth $104.6 million, including real estate loans of $102.7 million.

Overall, Bankrate believes that, as of June 30, 2017, Benchmark Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank faired on the three key criteria Bankrate used to evaluate American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of a bank's financial strength. It acts as a cushion against losses and as protection for accountholders when a bank is experiencing financial instability. From a safety and soundness perspective, the more capital, the better.
Benchmark Bank did better than the national average of 13.38 points on our test to measure the adequacy of a bank's capital, scoring 18 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Benchmark Bank's Tier 1 capital ratio was 15.69 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial difficulties.

Overall, Benchmark Bank held equity amounting to 13.79 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

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

A bank with a large number of these kinds of assets may eventually be forced to use capital to absorb losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, diminishing earnings and increasing the chances of a failure in the future.

Benchmark Bank scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 0.33 percent of Benchmark Bank'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 problem assets . How large that reserve is can be a helpful 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 Benchmark Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.

On Bankrate's test of earnings, Benchmark Bank scored 10 out of a possible 30, lower than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Benchmark Bank was 4.52 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $383,000 on total equity of $17.2 million. The bank experienced an annualized return on average assets, or ROA, of 0.59 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.