Safe and Sound

First National Bank of South Carolina

Holly Hill, SC
4
Star Rating
Founded in 1905, First National Bank of South Carolina is an FDIC-insured bank based in Holly Hill, SC. As of December 31, 2017, the bank had equity of $23.6 million on $192.7 million in assets.

Thanks to the work of 63 full-time employees in 8 offices in SC, the bank has amassed loans and leases worth $81.3 million, including real estate loans of $73.3 million. The bank currently holds $165.2 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, First National Bank of South Carolina exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for depositors during times of financial instability for the bank. It follows then that a bank's level of capital is a useful measurement of a bank's financial resilience. When it comes to safety and soundness, the more capital, the better.

First National Bank of South Carolina achieved a score of 16 out of a possible 30 points on our test to measure the adequacy of a bank's capital, exceeding the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. First National Bank of South Carolina's Tier 1 capital ratio was 24.67 percent, exceeding the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial challenges.

Overall, First National Bank of South Carolina held equity amounting to 12.23 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

Having lots of these types of assets suggests a bank could have to use capital to cover losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, First National Bank of South Carolina scored 36 out of a possible 40 points, below the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 1.83 percent of First National 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 keep a reserve known as an "allowance for loan and lease losses" to deal with problem 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 South Carolina'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. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

On Bankrate's test of earnings, First National Bank of South Carolina scored 10 out of a possible 30, falling short of the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. First National Bank of South Carolina's most recent annualized quarterly return on equity was 4.08 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $948,000 on total equity of $23.6 million. The bank experienced an annualized return on average assets, or ROA, of 0.50 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.