Safe and Sound

Grant County Bank

Medford, OK
4
Star Rating
Grant County Bank is a Medford, OK-based, FDIC-insured bank dating back to 1895. Regulatory filings show the bank having equity of $8.7 million on assets of $66.7 million, as of December 31, 2017.

With 8 full-time employees, the bank currently holds loans and leases worth $18.4 million, including real estate loans of $7.2 million. U.S. bank customers currently have $57.5 million in deposits with the bank.

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

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for depositors when a bank is experiencing economic trouble. It follows then that when it comes to measuring an a bank's financial strength, capital is key. From a safety and soundness perspective, the higher the capital, the better.

Grant County Bank scored 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 essential measure of this buffer is a bank's Tier 1 capital ratio. Grant County Bank's Tier 1 capital ratio was 27.32 percent, exceeding the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather economic headwinds.

Overall, Grant County Bank held equity amounting to 13.07 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid mortgages.

A bank with large numbers of these kinds of assets could eventually be forced to use capital to cover losses, cutting down on its cushion 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, pushing down earnings and increasing the risk of a future failure.

Grant County Bank finished below the national average of 37.49 on Bankrate's asset quality test, racking up 36 out of a possible 40 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, 4.49 percent of Grant County Bank'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 maintain 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 problematic loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Grant County Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand economic trouble. Losses, on the other hand, lessen a bank's ability to do those things.

Grant County Bank underperformed the average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

One key way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Grant County Bank's most recent annualized quarterly return on equity was 3.52 percent, below the national average of 8.10 percent.

The bank earned net income of $312,000 on total equity of $8.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.46 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.