Safe and Sound

Hendricks County Bank and Trust Company

Brownsburg, IN
4
Star Rating
Hendricks County Bank and Trust Company is an FDIC-insured bank founded in 1908 and currently headquartered in Brownsburg, IN. Regulatory filings show the bank having equity of $18.7 million on assets of $151.0 million, as of December 31, 2017.

With 47 full-time employees in 5 offices in IN, the bank has amassed loans and leases worth $91.1 million, including real estate loans of $80.2 million. U.S. bank customers currently have $132.2 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Hendricks County Bank and Trust Company 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 key criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is crucial. It works as a buffer against losses and as protection for depositors when a bank is experiencing economic trouble. When looking at safety and soundness, more capital is better.

Hendricks County Bank and Trust Company achieved a score of 16 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 13.13.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Hendricks County Bank and Trust Company's Tier 1 capital ratio was 18.50 percent, above the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial downturns.

Overall, Hendricks County Bank and Trust Company held equity amounting to 12.41 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

A bank with large numbers of these types of assets could eventually be required to use capital to cover losses, reducing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and elevating the chances of a future failure.

Hendricks County Bank and Trust Company scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 37.49.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, none of Hendricks County Bank and Trust Company's loans were noncurrent -- in other words, 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 problem assets . Comparing how large that reserve is to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Hendricks County Bank and Trust Company's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.

Hendricks County Bank and Trust Company scored 8 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for Hendricks County Bank and Trust Company was 3.09 percent, below the national average of 8.10 percent.

The bank reported net income of $572,000 on total equity of $18.7 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.37 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.