Safe and Sound

The Mt. Victory State Bank

Mount Victory, OH
4
Star Rating
The Mt. Victory State Bank is a Mount Victory, OH-based, FDIC-insured bank started in 1929. As of December 31, 2017, the bank had equity of $1.8 million on $17.3 million in assets.

Thanks to the work of 5 full-time employees, the bank currently holds loans and leases worth $5.9 million, including real estate loans of $3.4 million. U.S. bank customers currently have $15.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Mt. Victory 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 did on the three important criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is key. It acts as a bulwark against losses and provides protection for depositors when a bank is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

The Mt. Victory State Bank received a score of 12 out of a possible 30 points on our test to measure capital adequacy, below the national average of 13.13.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. The Mt. Victory State Bank's Tier 1 capital ratio was 16.56 percent, higher than the 6 percent level regulators consider adequate, but less than 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, The Mt. Victory State Bank held equity amounting to 10.67 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid loans.

Having lots of these types of assets means a bank could have to use capital to cover losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, diminishing earnings and elevating the risk of a failure in the future.

The Mt. Victory State Bank exceeded the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.53 percent of The Mt. Victory State 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 maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." 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 at-risk loans. Unfortunately, the FDIC did not provide information on The Mt. Victory State Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money have less ability to do those things.

The Mt. Victory State Bank scored 6 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for The Mt. Victory State Bank was 2.42 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $45,000 on total equity of $1.8 million. The bank experienced an annualized return on average assets, or ROA, of 0.25 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.