Safe and Sound

Calvin B. Taylor Banking Company of Berlin, Maryland

Berlin, MD
5
Star Rating
Berlin, MD-based Calvin B. Taylor Banking Company of Berlin, Maryland is an FDIC-insured bank started in 1890. As of December 31, 2017, the bank had equity of $78.9 million on $519.3 million in assets.

U.S. bank customers have $439.7 million on deposit at 11 offices in multiple states run by 98 full-time employees. With that footprint, the bank currently holds loans and leases worth $294.4 million, $263.2 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, Calvin B. Taylor Banking Company of Berlin, Maryland exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three key criteria Bankrate used to score American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial resilience. It acts as a cushion against losses and provides protection for accountholders when a bank is experiencing financial trouble. When it comes to safety and soundness, more capital is preferred.

Calvin B. Taylor Banking Company of Berlin, Maryland exceeded the national average of 13.13 points on our test to measure capital adequacy, racking up 22 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Calvin B. Taylor Banking Company of Berlin, Maryland's Tier 1 capital ratio was 26.66 percent, above the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial challenges.

Overall, Calvin B. Taylor Banking Company of Berlin, Maryland held equity amounting to 15.20 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

A bank with a large number of these kinds of assets may eventually be forced to use capital to absorb losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, Calvin B. Taylor Banking Company of Berlin, Maryland scored 40 out of a possible 40 points, beating out the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 0.32 percent of Calvin B. Taylor Banking Company of Berlin, Maryland'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 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . That reserve's size can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Calvin B. Taylor Banking Company of Berlin, Maryland'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, boosting its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, have less ability to do those things.

Calvin B. Taylor Banking Company of Berlin, Maryland scored 14 out of a possible 30 on Bankrate's test of earnings, below the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. Calvin B. Taylor Banking Company of Berlin, Maryland's most recent annualized quarterly return on equity was 6.99 percent, below the national average of 8.10 percent.

The bank earned net income of $5.5 million on total equity of $78.9 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.09 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.