Safe and Sound

Standing Stone Bank

Lancaster, OH
4
Star Rating
Founded in 1989, Standing Stone Bank is an FDIC-insured bank headquartered in Lancaster, OH. As of December 31, 2017, the bank had equity of $7.5 million on $105.0 million in assets.

Thanks to the work of 32 full-time employees in 3 offices in OH, the bank currently holds loans and leases worth $73.1 million, including $53.9 million worth of real estate loans. U.S. bank customers currently have $79.0 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Standing Stone Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to evaluate U.S. banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for depositors during periods of financial trouble for the bank. Therefore, a bank's level of capital is a key measurement of an institution's financial resilience. When looking at safety and soundness, more capital is preferred.

Standing Stone Bank fell below the national average of 13.13 on our test to measure the adequacy of a bank's capital, racking up 6 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Standing Stone Bank's Tier 1 capital ratio was 10.39 percent, above the 6 percent level considered adequate by regulators, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic challenges.

Overall, Standing Stone Bank held equity amounting to 7.16 percent of its assets, which was lower than 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 problem assets, such as past-due loans.

Having extensive holdings of these types of assets suggests a bank may have to use capital to cover losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, decreasing earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, Standing Stone Bank scored 40 out of a possible 40 points, beating the national average of 37.49 points.

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, 0.43 percent of Standing Stone Bank's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below 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 reserve's size to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Standing Stone Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.

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

One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Standing Stone Bank's most recent annualized quarterly return on equity was 4.55 percent, below the national average of 8.10 percent.

The bank recorded net income of $339,000 on total equity of $7.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.33 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.