Safe and Sound

The Brand Banking Company

Lawrenceville, GA
4
Star Rating
The Brand Banking Company is an FDIC-insured bank started in 1905 and currently headquartered in Lawrenceville, GA. As of June 30, 2017, the bank held equity of $230.5 million on $2,310,783,000 in assets.

U.S. bank customers have $1.89 billion on deposit at 8 offices in GA run by 486 full-time employees. With that footprint, the bank currently holds loans and leases worth $1.86 billion, including real estate loans of $1.19 billion.

Overall, Bankrate believes that, as of June 30, 2017, The Brand Banking Company exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank faired on the three important criteria Bankrate used to score American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for accountholders during periods of economic instability for the bank. It follows then that a bank's level of capital is a key measurement of a bank's financial fortitude. When looking at safety and soundness, the higher the capital, the better.
The Brand Banking Company received a score of 10 out of a possible 30 points on our test to measure the adequacy of a bank's capital, lower than the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. The Brand Banking Company's Tier 1 capital ratio was 11.46 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial downturns.

Overall, The Brand Banking Company held equity amounting to 9.98 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended to try to understand how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due loans.

A bank with extensive holdings of these types of assets may eventually be required to use capital to absorb losses, diminishing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, pushing down earnings and elevating the risk of a future failure.

On Bankrate's asset quality test, The Brand Banking Company scored 28 out of a possible 40 points, less than the national average of 37.62 points.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 2.69 percent of The Brand Banking Company'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 to deal with problem assets known as an "allowance for loan and lease losses." The size of that reserve can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on The Brand Banking Company's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.

On Bankrate's test of earnings, The Brand Banking Company scored 18 out of a possible 30, exceeding the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. The Brand Banking Company's most recent annualized quarterly return on equity was 9.37 percent, above the national average of 9.28 percent.

The bank earned net income of $10.5 million on total equity of $230.5 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.90 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.