Safe and Sound

Phenix-Girard Bank

Phenix City, AL
5
Star Rating
Started in 1904, Phenix-Girard Bank is an FDIC-insured bank based in Phenix City, AL. The bank holds equity of $26.4 million on assets of $182.1 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 40 full-time employees in 4 offices in AL, the bank currently holds loans and leases worth $70.9 million, including real estate loans of $68.6 million. The bank currently holds $143.1 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Phenix-Girard Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank fared on the three important criteria Bankrate used to grade American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a bank's financial resilience. It acts as a buffer against losses and as protection for accountholders when a bank is experiencing economic trouble. When it comes to safety and soundness, more capital is better.

On our test to measure capital adequacy, Phenix-Girard Bank scored 20 out of a possible 30 points, beating the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Phenix-Girard Bank's Tier 1 capital ratio was 28.31 percent, above the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic challenges.

Overall, Phenix-Girard Bank held equity amounting to 14.48 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 problem assets, such as unpaid mortgages, on the bank's capitalization and allocated loan loss reserves.

A bank with extensive holdings of these kinds of assets could eventually be required to use capital to cover losses, diminishing 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 money, diminishing earnings and elevating the chances of a failure in the future.

Phenix-Girard Bank scored below the national average of 37.49 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

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, 0.51 percent of Phenix-Girard Bank'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 to handle troubled assets known as an "allowance for loan and lease losses." That reserve's size can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Phenix-Girard Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance 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 more resilient in tough times. Obviously, banks that are losing money are less able to do those things.

Phenix-Girard Bank scored 16 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for Phenix-Girard Bank was 7.63 percent, below the national average of 8.10 percent.

The bank earned net income of $2.0 million on total equity of $26.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.13 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.