Safe and Sound

Bank of Winona

Winona, MS
5
Star Rating
Bank of Winona is a Winona, MS-based, FDIC-insured bank started in 1885. Regulatory filings show the bank having equity of $12.9 million on $114,505,000 in assets, as of June 30, 2017.

With 19 full-time employees, the bank currently holds loans and leases worth $45.7 million, including real estate loans of $36.5 million. U.S. bank customers currently have $97.7 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Bank of Winona exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank faired on the three key criteria Bankrate used to score American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial fortitude. It acts as a cushion against losses and affords protection for accountholders when a bank is struggling financially. When it comes to safety and soundness, more capital is preferred.
Bank of Winona scored above the national average of 13.38 points on our test to measure capital adequacy, racking up 14 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. Bank of Winona's Tier 1 capital ratio was 19.31 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to financial challenges.

Overall, Bank of Winona held equity amounting to 11.28 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due mortgages.

A bank with a large number of these kinds of assets may eventually have to use capital to cover losses, cutting down on 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 reduced earnings and potentially more risk of a future failure.

Bank of Winona scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 1.40 percent of Bank of Winona's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the the size of that reserve to the total amount of problematic loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Bank of Winona's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Banks that are losing money, however, are less able to do those things.

On Bankrate's test of earnings, Bank of Winona scored 20 out of a possible 30, beating out the national average of 16.52.

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 Bank of Winona was 11.09 percent, above the national average of 9.28 percent.

The bank recorded net income of $670,000 on total equity of $12.9 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.16 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 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.