Safe and Sound

Roanoke Valley Savings Bank, SSB

Roanoke Rapids, NC
5
Star Rating
Roanoke Valley Savings Bank, SSB is an FDIC-insured bank started in 1929 and currently headquartered in Roanoke Rapids, NC. Regulatory filings show the bank having equity of $9.6 million on assets of $35.6 million, as of December 31, 2017.

Thanks to the efforts of 5 full-time employees, the bank holds loans and leases worth $13.7 million, including $13.8 million worth of real estate loans. U.S. bank customers currently have $25.3 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Roanoke Valley Savings Bank, SSB exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to evaluate U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a bank's financial fortitude. It acts as a buffer against losses and affords protection for depositors when a bank is experiencing economic trouble. When it comes to safety and soundness, more capital is better.

Roanoke Valley Savings Bank, SSB beat out the national average of 13.13 points on our test to measure capital adequacy, achieving a score of 30 out of a possible 30 points.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Roanoke Valley Savings Bank, SSB's Tier 1 capital ratio was 61.04 percent, higher than the 6 percent level considered adequate by regulators, and above the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial difficulties.

Overall, Roanoke Valley Savings Bank, SSB held equity amounting to 26.80 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 reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as unpaid mortgages.

A bank with a large number of these kinds of assets may eventually be required 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 thus aren't earning money, reducing earnings and elevating the chances of a future failure.

Roanoke Valley Savings Bank, SSB scored 40 out of a possible 40 points on Bankrate's asset quality test, better than the national average of 37.49.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.62 percent of Roanoke Valley Savings Bank, SSB'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 maintain 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 helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Roanoke Valley Savings Bank, SSB's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses lessen a bank's ability to do those things.

Roanoke Valley Savings Bank, SSB underperformed the average on Bankrate's test of earnings, achieving a score of 2 out of a possible 30.

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 Roanoke Valley Savings Bank, SSB was 0.46 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $44,000 on total equity of $9.6 million. The bank reported an annualized return on average assets, or ROA, of 0.12 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.