Safe and Sound

First National Bank of Coffee County

Douglas, GA
5
Star Rating
First National Bank of Coffee County is an FDIC-insured bank founded in 1991 and currently headquartered in Douglas, GA. The bank holds equity of $16.8 million on $161.1 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 33 full-time employees in 2 offices in multiple states, the bank holds loans and leases worth $108.2 million, $93.6 million of which are for real estate. U.S. bank customers currently have $143.6 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, First National Bank of Coffee County exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three key criteria Bankrate used to evaluate U.S. banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial stability, capital is crucial. It works as a bulwark against losses and as protection for depositors during periods of economic trouble for the bank. From a safety and soundness perspective, the more capital, the better.

First National Bank of Coffee County fell below the national average of 13.13 on our test to measure capital adequacy, scoring 12 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. First National Bank of Coffee County's Tier 1 capital ratio was 16.44 percent, higher than the 6 percent level regulators consider adequate, but less 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 downturns.

Overall, First National Bank of Coffee County held equity amounting to 10.44 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 reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as past-due mortgages.

A bank with a large number of these kinds of assets could eventually be required to use capital to absorb losses, diminishing its equity buffer. 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.

First National Bank of Coffee County exceeded the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.29 percent of First National Bank of Coffee County'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 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 at-risk loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on First National Bank of Coffee County'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, giving a boost to its capital cushion, or use them to deal with problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.

First National Bank of Coffee County did above-average on Bankrate's earnings test, achieving a score of 22 out of a possible 30.

One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for First National Bank of Coffee County was 12.73 percent, above the national average of 8.10 percent.

The bank recorded net income of $2.0 million on total equity of $16.8 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.37 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.