Safe and Sound

Madison County Community Bank

Madison, FL
3
Star Rating
Madison County Community Bank is an FDIC-insured bank started in 1999 and currently headquartered in Madison, FL. The bank has equity of $10.1 million on $124.6 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 27 full-time employees, the bank has amassed loans and leases worth $53.7 million, $42.7 million of which are for real estate. U.S. bank customers currently have $114.1 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Madison County Community Bank exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three important criteria Bankrate used to score American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for depositors when a bank is struggling financially. It follows then that when it comes to measuring an an institution's financial resilience, capital is essential. When looking at safety and soundness, the higher the capital, the better.

Madison County Community Bank finished below the national average of 13.13 on our test to measure the adequacy of a bank's capital, racking up 8 out of a possible 30 points.

One important measure of this buffer is a bank's Tier 1 capital ratio. Madison County Community Bank's Tier 1 capital ratio was 17.09 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 stand up to economic headwinds.

Overall, Madison County Community Bank held equity amounting to 8.08 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as past-due mortgages.

Having large numbers of these types of assets could eventually require a bank to use capital to cover losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, pushing down earnings and increasing the chances of a failure in the future.

Madison County Community Bank scored 36 out of a possible 40 points on Bankrate's test of asset quality, lower than the national average of 37.49.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.23 percent of Madison County Community 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 troubled assets . Comparing the size of that reserve to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Madison County Community Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, likely making the bank better prepared to withstand financial shocks. Banks that are losing money, however, have less ability to do those things.

Madison County Community Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Madison County Community Bank's most recent annualized quarterly return on equity was 4.52 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $451,000 on total equity of $10.1 million. The bank had an annualized return on average assets, or ROA, of 0.38 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.