Safe and Sound

Horry County State Bank

Loris, SC
4
Star Rating
Horry County State Bank is a Loris, SC-based, FDIC-insured bank founded in 1988. As of June 30, 2017, the bank had equity of $36.8 million on $390,233,000 in assets.

With 79 full-time employees in 9 offices in SC, the bank currently holds loans and leases worth $229.0 million, including real estate loans of $194.0 million. U.S. bank customers currently have $322.2 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Horry County State Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown 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 an essential measurement of a bank's financial fortitude. It acts as a buffer against losses and affords protection for accountholders during times of economic instability for the bank. When looking at safety and soundness, the more capital, the better.
Horry County State Bank fell below the national average of 13.38 on our test to measure the adequacy of a bank's capital, achieving a score of 10 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Horry County State Bank's Tier 1 capital ratio was 14.84 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather economic headwinds.

Overall, Horry County State Bank held equity amounting to 9.43 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

A bank with lots of these types of assets could eventually be required to use capital to absorb losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and elevating the chances of a failure in the future.

Horry County State Bank fell below the national average of 37.62 on Bankrate's test of asset quality, racking up 36 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, 0.81 percent of Horry County State 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 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 Horry County State 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, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. Conversely, losses reduce a bank's ability to do those things.

Horry County State Bank underperformed the average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Horry County State Bank's most recent annualized quarterly return on equity was 4.25 percent, below the national average of 9.28 percent.

The bank earned net income of $754,000 on total equity of $36.8 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.39 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.