Safe and Sound

Carolina Premier Bank

Charlotte, NC
4
Star Rating
Carolina Premier Bank is a Charlotte, NC-based, FDIC-insured bank that opened its doors in 2007. Regulatory filings show the bank having equity of $24.7 million on $262,336,000 in assets, as of June 30, 2017.

With 54 full-time employees in 4 offices in multiple states, the bank currently holds loans and leases worth $206.0 million, including real estate loans of $174.6 million. U.S. bank customers currently have $207.7 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Carolina Premier 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 important criteria Bankrate used to grade U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for accountholders during periods of economic trouble for the bank. Therefore, when it comes to measuring an an institution's financial fortitude, capital is valuable. From a safety and soundness perspective, more capital is preferred.
On our test to measure capital adequacy, Carolina Premier Bank received a score of 10 out of a possible 30 points, lower than the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Carolina Premier Bank's Tier 1 capital ratio was 10.54 percent, higher than the 6 percent level considered adequate by regulators, but below the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial difficulties.

Overall, Carolina Premier Bank held equity amounting to 9.42 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due mortgages.

A bank with extensive holdings of these types of assets could eventually be forced to use capital to absorb losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, resulting in lower earnings and potentially more risk of a failure in the future.

Carolina Premier Bank scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 37.62.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.76 percent of Carolina Premier 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 known as an "allowance for loan and lease losses" to deal with troubled assets . That reserve's size can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Carolina Premier Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

Carolina Premier Bank scored 12 out of a possible 30 on Bankrate's test of earnings, below the national average of 16.52.

One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for Carolina Premier Bank was 5.48 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $663,000 on total equity of $24.7 million. The bank reported an annualized return on average assets, or ROA, of 0.51 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.