Safe and Sound

Enterprise Bank of South Carolina

Ehrhardt, SC
1
Star Rating
Enterprise Bank of South Carolina is an FDIC-insured bank founded in 1920 and currently based in Ehrhardt, SC. Regulatory filings show the bank having equity of $16.4 million on $316.5 million in assets, as of December 31, 2017.

Thanks to the efforts of 101 full-time employees in 12 offices in SC, the bank currently holds loans and leases worth $172.1 million, including real estate loans of $147.8 million. The bank currently holds $299.5 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Enterprise Bank of South Carolina exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's a look at how the bank fared on the three key criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for depositors during periods of economic instability for the bank. It follows then that a bank's level of capital is a key measurement of an institution's financial strength. When looking at safety and soundness, the more capital, the better.

On our test to measure the adequacy of a bank's capital, Enterprise Bank of South Carolina received a score of 2 out of a possible 30 points, less than the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Enterprise Bank of South Carolina's Tier 1 capital ratio was 9.80 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic headwinds.

Overall, Enterprise Bank of South Carolina held equity amounting to 5.18 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these types of assets may eventually require a bank to use capital to cover losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in reduced earnings and potentially more risk of a failure in the future.

Enterprise Bank of South Carolina fell short of the national average of 37.49 on Bankrate's test of asset quality, racking up 4 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 4.39 percent of Enterprise Bank of South Carolina'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 troubled assets . Comparing the reserve's size to the total amount of problem loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Enterprise Bank of South Carolina's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.

Enterprise Bank of South Carolina scored 0 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Enterprise Bank of South Carolina was 30.84 percent, above the national average of 8.10 percent.

The bank earned net income of $4.7 million on total equity of $16.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.45 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.