Safe and Sound

The Girard National Bank

Girard, KS
4
Star Rating
The Girard National Bank is an FDIC-insured bank started in 1929 and currently headquartered in Girard, KS. The bank has equity of $77.5 million on $648,230,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 170 full-time employees in 15 offices in multiple states, the bank currently holds loans and leases worth $440.5 million, including real estate loans of $206.3 million. The bank currently holds $514.3 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, The Girard National Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank faired on the three major criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a bank's financial fortitude. It acts as a buffer against losses and affords protection for accountholders during times of financial trouble for the bank. From a safety and soundness perspective, the more capital, the better.
On our test to measure capital adequacy, The Girard National Bank received a score of 12 out of a possible 30 points, below the national average of 13.38.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. The Girard National Bank's Tier 1 capital ratio was 12.82 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to financial downturns.

Overall, The Girard National Bank held equity amounting to 11.95 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 unpaid mortgages.

Having large numbers of these kinds of assets may eventually force a bank to use capital to absorb 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 no longer earning money, diminishing earnings and increasing the chances of a future failure.

On Bankrate's asset quality test, The Girard National Bank scored 32 out of a possible 40 points, failing to reach the national average of 37.62 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 2.81 percent of The Girard National Bank's loans were noncurrent, meaning 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 problem loans. Unfortunately, the FDIC did not provide information on The Girard National Bank'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, increasing its capital buffer, or use them to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Losses, on the other hand, take away from a bank's ability to do those things.

The Girard National Bank scored 16 out of a possible 30 on Bankrate's earnings test, lower than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The Girard National Bank's most recent annualized quarterly return on equity was 7.72 percent, below the national average of 9.28 percent.

The bank earned net income of $3.0 million on total equity of $77.5 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.92 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.