Safe and Sound

BankFirst Financial Services

Columbus, MS
4
Star Rating
Started in 1888, BankFirst Financial Services is an FDIC-insured bank headquartered in Columbus, MS. As of June 30, 2017, the bank had equity of $87.9 million on $944,927,000 in assets.

Thanks to the work of 194 full-time employees in 17 offices in multiple states, the bank has amassed loans and leases worth $736.6 million, including real estate loans of $616.2 million. The bank currently holds $841.4 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, BankFirst Financial Services exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three important criteria Bankrate used to evaluate U.S. banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial stability, capital is key. It acts as a cushion against losses and provides protection for accountholders during periods of economic trouble for the bank. From a safety and soundness perspective, more capital is preferred.
On our test to measure the adequacy of a bank's capital, BankFirst Financial Services received a score of 8 out of a possible 30 points, falling short of the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. BankFirst Financial Services's Tier 1 capital ratio was 11.19 percent, higher than the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather economic challenges.

Overall, BankFirst Financial Services held equity amounting to 9.30 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 troubled assets, such as unpaid loans.

A bank with large numbers of these types of assets may eventually be forced to use capital to cover losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a future failure.

BankFirst Financial Services scored 36 out of a possible 40 points on Bankrate's asset quality test, coming in below the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, 1.48 percent of BankFirst Financial Services'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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . The size of that reserve can be a widely used indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on BankFirst Financial Services's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

BankFirst Financial Services scored 18 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for BankFirst Financial Services was 9.05 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $3.9 million on total equity of $87.9 million. The bank had an annualized return on average assets, or ROA, of 0.83 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.