Safe and Sound

The Geo. D. Warthen Bank

Sandersville, GA
3
Star Rating
Founded in 1871, The Geo. D. Warthen Bank is an FDIC-insured bank headquartered in Sandersville, GA. Regulatory filings show the bank having equity of $14.8 million on $173.9 million in assets, as of December 31, 2017.

Thanks to the work of 38 full-time employees in 2 offices in GA, the bank holds loans and leases worth $109.3 million, including $79.0 million worth of real estate loans. U.S. bank customers currently have $157.9 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Geo. D. Warthen Bank exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three important criteria Bankrate used to evaluate American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for depositors during times of economic trouble for the bank. Therefore, when it comes to measuring an an institution's financial strength, capital is crucial. When it comes to safety and soundness, the more capital, the better.

The Geo. D. Warthen Bank fell below the national average of 13.13 on our test to measure capital adequacy, receiving a score of 8 out of a possible 30 points.

One important measure of this buffer is a bank's Tier 1 capital ratio. The Geo. D. Warthen Bank's Tier 1 capital ratio was 12.50 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather economic difficulties.

Overall, The Geo. D. Warthen Bank held equity amounting to 8.53 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate 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 loans.

A bank with extensive holdings of these types of assets could eventually be forced to use capital to cover losses, cutting down on 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, diminishing earnings and increasing the chances of a future failure.

The Geo. D. Warthen Bank fell short of the national average of 37.49 on Bankrate's asset quality test, racking up 24 out of a possible 40 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, 1.83 percent of The Geo. D. Warthen 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 keep a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing how large that reserve is to the total amount of at-risk loans can be a useful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on The Geo. D. Warthen Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to address problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

The Geo. D. Warthen Bank exceeded the national average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for The Geo. D. Warthen Bank was 8.50 percent, above the national average of 8.10 percent.

The bank earned net income of $1.2 million on total equity of $14.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.71 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.