Safe and Sound

United Mississippi Bank

Natchez, MS
4
Star Rating
Started in 1973, United Mississippi Bank is an FDIC-insured bank headquartered in Natchez, MS. Regulatory filings show the bank having equity of $36.1 million on $349,959,000 in assets, as of June 30, 2017.

Thanks to the efforts of 134 full-time employees in 11 offices in multiple states, the bank currently holds loans and leases worth $255.4 million, $212.1 million of which are for real estate. The bank currently holds $311.6 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, United Mississippi Bank 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 grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial strength. It acts as a cushion against losses and affords protection for accountholders during periods of financial instability for the bank. From a safety and soundness perspective, the higher the capital, the better.
On our test to measure the adequacy of a bank's capital, United Mississippi Bank received a score of 10 out of a possible 30 points, falling short of the national average of 13.38.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. United Mississippi Bank's Tier 1 capital ratio was 12.39 percent, exceeding 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 headwinds.

Overall, United Mississippi Bank held equity amounting to 10.31 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

Having lots of these types of assets suggests a bank may have to use capital to cover losses, reducing its equity cushion. 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, decreasing earnings and elevating the risk of a failure in the future.

United Mississippi Bank scored 36 out of a possible 40 points on Bankrate's test of asset quality, failing to reach 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, 0.73 percent of United Mississippi Bank's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

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

Earnings score

How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the bank better able to withstand economic shocks. Losses, on the other hand, lessen a bank's ability to do those things.

On Bankrate's earnings test, United Mississippi Bank scored 20 out of a possible 30, better than the national average of 16.52.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. United Mississippi Bank's most recent annualized quarterly return on equity was 10.93 percent, above the national average of 9.28 percent.

The bank recorded net income of $2.0 million on total equity of $36.1 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.11 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but 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.