Safe and Sound

Durden Banking Company, Incorporated

Twin City, GA
5
Star Rating
Durden Banking Company, Incorporated is an FDIC-insured bank started in 1934 and currently based in Twin City, GA. As of December 31, 2017, the bank had equity of $25.2 million on $163.8 million in assets.

With 47 full-time employees in 4 offices in GA, the bank currently holds loans and leases worth $103.6 million, including real estate loans of $80.1 million. U.S. bank customers currently have $138.1 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Durden Banking Company, Incorporated exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three major criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for account holders during periods of economic instability for the bank. Therefore, a bank's level of capital is a key measurement of an institution's financial resilience. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, Durden Banking Company, Incorporated achieved a score of 22 out of a possible 30 points, beating out the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Durden Banking Company, Incorporated's Tier 1 capital ratio was 25.16 percent, higher than the 6 percent level considered adequate by regulators, but below 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, Durden Banking Company, Incorporated held equity amounting to 15.35 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets may eventually force a bank to use capital to absorb losses, decreasing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, decreasing earnings and elevating the chances of a future failure.

Durden Banking Company, Incorporated scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 37.49.

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, 1.20 percent of Durden Banking Company, Incorporated'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the size of that reserve to the total amount of at-risk loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Durden Banking Company, Incorporated'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, expanding its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.

Durden Banking Company, Incorporated outperformed the average on Bankrate's test of earnings, achieving a score of 22 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one widely used measure of a bank's earnings. Durden Banking Company, Incorporated's most recent annualized quarterly return on equity was 12.30 percent, above the national average of 8.10 percent.

The bank earned net income of $3.0 million on total equity of $25.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.86 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.