Safe and Sound

New Republic Savings Bank

Roanoke Rapids, NC
4
Star Rating
New Republic Savings Bank is a Roanoke Rapids, NC-based, FDIC-insured bank started in 1998. As of December 31, 2017, the bank held equity of $6.6 million on assets of $59.7 million.

U.S. bank customers have $45.8 million on deposit at 2 offices in NC run by 15 full-time employees. With that footprint, the bank has amassed loans and leases worth $52.0 million, including $51.6 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, New Republic Savings Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank fared on the three major criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of an institution's financial fortitude. It works as a cushion against losses and as protection for accountholders during times of economic trouble for the bank. From a safety and soundness perspective, the more capital, the better.

New Republic Savings Bank achieved a score of 14 out of a possible 30 points on our test to measure the adequacy of a bank's capital, beating out the national average of 13.13.

A bank's Tier 1 capital ratio is an essential measure of this buffer. New Republic Savings Bank's Tier 1 capital ratio was 15.45 percent, above the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial challenges.

Overall, New Republic Savings Bank held equity amounting to 11.01 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

A bank with extensive holdings of these types of assets could eventually be required to use capital to cover losses, shrinking its equity cushion. 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, diminishing earnings and increasing the chances of a failure in the future.

New Republic Savings Bank finished below the national average of 37.49 on Bankrate's test of asset quality, racking up 32 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 December 31, 2017, 1.15 percent of New Republic Savings Bank's loans were noncurrent, meaning 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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the size of that reserve to the total amount of problem loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on New Republic 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. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the bank better prepared to withstand financial trouble. However, banks that are losing money have less ability to do those things.

On Bankrate's test of earnings, New Republic Savings Bank scored 10 out of a possible 30, below the national average of 15.12.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for New Republic Savings Bank was 4.86 percent, below the national average of 8.10 percent.

The bank earned net income of $324,000 on total equity of $6.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.53 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.