Safe and Sound

Evergreen National Bank

Evergreen, CO
3
Star Rating
Started in 1981, Evergreen National Bank is an FDIC-insured bank based in Evergreen, CO. As of December 31, 2017, the bank had equity of $9.5 million on $110.6 million in assets.

Thanks to the efforts of 34 full-time employees in 4 offices in CO, the bank has amassed loans and leases worth $68.5 million, including real estate loans of $63.7 million. The bank currently holds $100.8 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Evergreen National Bank exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for 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 is an essential measurement of an institution's financial resilience. It works as a cushion against losses and affords protection for depositors during periods of financial trouble for the bank. When looking at safety and soundness, the higher the capital, the better.

Evergreen National Bank fell below the national average of 13.13 on our test to measure capital adequacy, racking up 8 out of a possible 30 points.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Evergreen National Bank's Tier 1 capital ratio was 15.34 percent, higher than 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 difficulties.

Overall, Evergreen National Bank held equity amounting to 8.62 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 capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

A bank with extensive holdings of these types of assets could eventually have to use capital to cover losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, Evergreen National Bank scored 36 out of a possible 40 points, falling short of the national average of 37.49 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.66 percent of Evergreen National Bank's loans were noncurrent -- in other words, 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 to deal with problem assets known as an "allowance for loan and lease losses." 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 problem loans. Unfortunately, the FDIC did not provide information on Evergreen National Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money are less able to do those things.

Evergreen National Bank received below-average marks on Bankrate's earnings test, achieving a score of 4 out of a possible 30.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Evergreen National Bank's most recent annualized quarterly return on equity was 1.43 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $139,000 on total equity of $9.5 million. The bank reported an annualized return on average assets, or ROA, of 0.13 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.