If you have a rooted Samsung smartphone and S Memo in it, then your username and password will be stored in plain text. This is obviously a scary discovery and further signifies the drawback for having a rooted smartphone. There always are a few security risks that may come along with a custom modified device. If you fail to check out an app before installing, it can actually be used to read the password file.
Apparently, developers failed to check security risks associated with their apps when the phone is rooted. In any case, the development team of S Memo may eventually release an update to fully encrypted sensitive data. Many people affected with this issue and a good solution is to unroot your device and root it again only if you need it. S-Memo is a useful note-taking app that can be synced with cloud services including Google Drive.