Safe and Sound

The Pleasants County Bank

Saint Marys, WV
4
Star Rating
The Pleasants County Bank is a Saint Marys, WV-based, FDIC-insured bank that opened its doors in 1896. As of December 31, 2017, the bank had equity of $6.7 million on assets of $63.1 million.

Thanks to the efforts of 18 full-time employees in 2 offices in WV, the bank currently holds loans and leases worth $34.2 million, including $23.7 million worth of real estate loans. U.S. bank customers currently have $55.8 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Pleasants County Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank did on the three key criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for depositors when a bank is experiencing financial instability. Therefore, a bank's level of capital is a key measurement of a bank's financial strength. When looking at safety and soundness, the higher the capital, the better.

The Pleasants County Bank finished below the national average of 13.13 on our test to measure the adequacy of a bank's capital, racking up 12 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. The Pleasants County Bank's Tier 1 capital ratio was 18.15 percent, exceeding 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 headwinds.

Overall, The Pleasants County Bank held equity amounting to 10.58 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

Having lots of these kinds of assets may eventually force a bank 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 interest for the bank, resulting in diminished earnings and potentially more risk of a failure in the future.

The Pleasants County Bank exceeded the national average of 37.49 on Bankrate's test of asset quality, 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, 0.14 percent of The Pleasants County 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 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on The Pleasants County 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 address problematic loans, likely making the bank better prepared to withstand financial shocks. Banks that are losing money, however, have less ability to do those things.

The Pleasants County Bank scored 4 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 15.12.

One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The Pleasants County Bank's most recent annualized quarterly return on equity was 1.32 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $90,000 on total equity of $6.7 million. The bank had an annualized return on average assets, or ROA, of 0.14 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.