Safe and Sound

Taylor County Bank

Campbellsville, KY
5
Star Rating
Founded in 1937, Taylor County Bank is an FDIC-insured bank based in Campbellsville, KY. The bank has equity of $24.3 million on $182.5 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 48 full-time employees in 4 offices in KY, the bank holds loans and leases worth $127.1 million, including real estate loans of $100.3 million. U.S. bank customers currently have $147.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Taylor County Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three major criteria Bankrate used to score American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial fortitude, capital is important. It acts as a cushion against losses and provides protection for depositors when a bank is struggling financially. From a safety and soundness perspective, more capital is preferred.

Taylor County Bank scored above the national average of 13.13 points on our test to measure capital adequacy, racking up 18 out of a possible 30 points.

One important measure of this buffer is a bank's Tier 1 capital ratio. Taylor County Bank's Tier 1 capital ratio was 18.92 percent, higher than the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic challenges.

Overall, Taylor County Bank held equity amounting to 13.30 percent of its assets, which exceeded 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 problem assets, such as past-due mortgages.

Having lots of these kinds of assets may eventually force a bank to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, decreasing earnings and increasing the risk of a future failure.

Taylor County Bank scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 37.49.

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, 0.39 percent of Taylor County 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 keep 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 problem loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Taylor County Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand economic trouble. Losses, on the other hand, reduce a bank's ability to do those things.

Taylor County Bank beat the national average on Bankrate's earnings test, achieving a score of 24 out of a possible 30.

One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for Taylor County Bank was 15.94 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $3.8 million on total equity of $24.3 million. The bank had an annualized return on average assets, or ROA, of 2.08 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.