Safe and Sound

The Bradford National Bank of Greenville

Greenville, IL
5
Star Rating
Greenville, IL-based The Bradford National Bank of Greenville is an FDIC-insured bank founded in 1867. The bank holds equity of $34.1 million on $288.3 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 50 full-time employees in 4 offices in IL, the bank currently holds loans and leases worth $142.6 million, including real estate loans of $119.5 million. U.S. bank customers currently have $246.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Bradford National Bank of Greenville exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three important criteria Bankrate used to evaluate American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for depositors during periods of economic instability for the bank. Therefore, a bank's level of capital is a key measurement of a bank's financial resilience. From a safety and soundness perspective, more capital is better.

The Bradford National Bank of Greenville scored above the national average of 13.13 points on our test to measure capital adequacy, achieving a score of 14 out of a possible 30 points.

A bank's Tier 1 capital ratio is an important measure of this buffer. The Bradford National Bank of Greenville's Tier 1 capital ratio was 16.83 percent, higher than the 6 percent level considered adequate by regulators, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial downturns.

Overall, The Bradford National Bank of Greenville held equity amounting to 11.84 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid loans, on the bank's loan loss reserves and overall capitalization.

Having large numbers of these kinds of assets could eventually require a bank 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 interest for the bank, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, The Bradford National Bank of Greenville scored 36 out of a possible 40 points, coming in below the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 1.95 percent of The Bradford National Bank of Greenville's loans were noncurrent -- in other words, 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 problem assets . That reserve's size can be a widely used 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 The Bradford National Bank of Greenville's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or use them to address problematic loans, likely making the bank better able to withstand economic shocks. Losses, on the other hand, reduce a bank's ability to do those things.

The Bradford National Bank of Greenville scored 20 out of a possible 30 on Bankrate's test of earnings, beating the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The Bradford National Bank of Greenville's most recent annualized quarterly return on equity was 10.90 percent, above the national average of 8.10 percent.

The bank reported net income of $3.6 million on total equity of $34.1 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.29 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.