Safe and Sound

EvaBank

Eva, AL
5
Star Rating
EvaBank is an FDIC-insured bank started in 1986 and currently headquartered in Eva, AL. Regulatory filings show the bank having equity of $81.3 million on assets of $376.5 million, as of December 31, 2017.

U.S. bank customers have $285.0 million on deposit at 6 offices in AL run by 85 full-time employees. With that footprint, the bank currently holds loans and leases worth $286.1 million, $254.4 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, EvaBank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three major criteria Bankrate used to grade American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial resilience, capital is important. It acts as a cushion against losses and as protection for accountholders when a bank is struggling financially. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, EvaBank racked up 30 out of a possible 30 points, exceeding the national average of 13.13.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. EvaBank's Tier 1 capital ratio was 29.45 percent, above the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic downturns.

Overall, EvaBank held equity amounting to 21.59 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 troubled assets, such as unpaid loans.

Having lots of these kinds of assets could eventually require a bank to use capital to cover losses, decreasing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

EvaBank scored 36 out of a possible 40 points on Bankrate's asset quality test, falling short of the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 2.12 percent of EvaBank'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 to handle problem assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of problem loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on EvaBank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.

EvaBank scored 20 out of a possible 30 on Bankrate's test of earnings, beating the national average of 15.12.

One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. EvaBank's most recent annualized quarterly return on equity was 13.02 percent, above the national average of 8.10 percent.

The bank earned net income of $9.7 million on total equity of $81.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 2.54 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.