Safe and Sound

Bank of Early

Blakely, GA
2
Star Rating
Founded in 1939, Bank of Early is an FDIC-insured bank based in Blakely, GA. Regulatory filings show the bank having equity of $11.4 million on $129.6 million in assets, as of December 31, 2017.

With 36 full-time employees in 4 offices in GA, the bank holds loans and leases worth $98.8 million, including real estate loans of $69.3 million. U.S. bank customers currently have $113.7 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Bank of Early exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three key criteria Bankrate used to score American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for account holders when a bank is struggling financially. It follows then that when it comes to measuring an an institution's financial fortitude, capital is important. When looking at safety and soundness, the higher the capital, the better.

Bank of Early received a score of 8 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 13.13.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Bank of Early's Tier 1 capital ratio was 11.89 percent, above the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather economic downturns.

Overall, Bank of Early held equity amounting to 8.79 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

Having extensive holdings of these kinds of assets may eventually require a bank 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 no longer earning interest for the bank, pushing down earnings and increasing the chances of a future failure.

On Bankrate's test of asset quality, Bank of Early scored 32 out of a possible 40 points, below the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 1.77 percent of Bank of Early'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 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . 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 Bank of Early's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand financial trouble. Obviously, banks that are losing money have less ability to do those things.

On Bankrate's earnings test, Bank of Early scored 2 out of a possible 30, lower than the national average of 15.12.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for Bank of Early was 0.61 percent, below the national average of 8.10 percent.

The bank reported net income of $70,000 on total equity of $11.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.05 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.