Safe and Sound

Great Southern Bank

Meridian, MS
4
Star Rating
Started in 1902, Great Southern Bank is an FDIC-insured bank based in Meridian, MS. The bank holds equity of $26.4 million on assets of $288.8 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 138 full-time employees in 12 offices in MS, the bank currently holds loans and leases worth $105.9 million, including real estate loans of $68.8 million. The bank currently holds $262.0 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Great Southern Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank fared on the three major criteria Bankrate used to evaluate 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 valuable. It acts as a bulwark against losses and as protection for accountholders when a bank is struggling financially. From a safety and soundness perspective, the more capital, the better.

Great Southern Bank scored below the national average of 13.13 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Great Southern Bank's Tier 1 capital ratio was 22.51 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic downturns.

Overall, Great Southern Bank held equity amounting to 9.15 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

Having extensive holdings of these types of assets suggests a bank may have to use capital to absorb losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

Great Southern Bank exceeded the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 0.77 percent of Great Southern Bank'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 keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." 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 Great Southern Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.

Great Southern Bank scored 18 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for Great Southern Bank was 8.08 percent, below the national average of 8.10 percent.

The bank recorded net income of $2.1 million on total equity of $26.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.72 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.