Safe and Sound

First State Bank of Randolph County

Cuthbert, GA
4
Star Rating
Founded in 1900, First State Bank of Randolph County is an FDIC-insured bank headquartered in Cuthbert, GA. The bank holds equity of $6.3 million on assets of $79.2 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 21 full-time employees in 2 offices in GA, the bank currently holds loans and leases worth $30.6 million, including $20.2 million worth of real estate loans. U.S. bank customers currently have $72.6 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, First State Bank of Randolph County exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three important criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial stability, capital is key. It acts as a cushion against losses and affords protection for accountholders when a bank is experiencing economic instability. When looking at safety and soundness, more capital is preferred.

First State Bank of Randolph County came in below the national average of 13.13 on our test to measure the adequacy of a bank's capital, scoring 6 out of a possible 30 points.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. First State Bank of Randolph County's Tier 1 capital ratio was 16.22 percent, above the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial downturns.

Overall, First State Bank of Randolph County held equity amounting to 7.97 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 impact of problem assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

Having large numbers of these types of assets could eventually require a bank to use capital to cover losses, diminishing 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 money, pushing down earnings and increasing the chances of a future failure.

First State Bank of Randolph County fell short of the national average of 37.49 on Bankrate's test of asset quality, racking up 36 out of a possible 40 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, 2.10 percent of First State Bank of Randolph County's loans were noncurrent, meaning 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 size of that reserve to the total amount of problematic loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on First State Bank of Randolph County's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank better prepared to withstand economic trouble. Obviously, banks that are losing money are less able to do those things.

On Bankrate's test of earnings, First State Bank of Randolph County scored 14 out of a possible 30, coming in below the national average of 15.12.

One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for First State Bank of Randolph County was 6.34 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $410,000 on total equity of $6.3 million. The bank reported an annualized return on average assets, or ROA, of 0.52 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.