Safe and Sound

The Peoples Bank of Georgia

Talbotton, GA
4
Star Rating
The Peoples Bank of Georgia is an FDIC-insured bank founded in 1891 and currently headquartered in Talbotton, GA. As of December 31, 2017, the bank had equity of $7.0 million on $77.2 million in assets.

Thanks to the efforts of 26 full-time employees in 3 offices in GA, the bank has amassed loans and leases worth $52.9 million, including $37.9 million worth of real estate loans. The bank currently holds $69.8 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, The Peoples Bank of Georgia exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank fared on the three key criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for depositors during times of financial instability for the bank. Therefore, a bank's level of capital is a crucial measurement of a bank's financial resilience. When looking at safety and soundness, more capital is preferred.

The Peoples Bank of Georgia scored below the national average of 13.13 on our test to measure capital adequacy, racking up 10 out of a possible 30 points.

A bank's Tier 1 capital ratio is an important measure of this buffer. The Peoples Bank of Georgia's Tier 1 capital ratio was 9.26 percent, exceeding the 6 percent level considered adequate by regulators, but below the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial difficulties.

Overall, The Peoples Bank of Georgia held equity amounting to 9.12 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as unpaid loans.

Having large numbers of these kinds of assets may eventually force a bank to use capital to absorb losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, diminishing earnings and increasing the chances of a failure in the future.

The Peoples Bank of Georgia scored 36 out of a possible 40 points on Bankrate's asset quality test, less than the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 1.30 percent of The Peoples Bank of Georgia'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 keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing how large that reserve is to the total amount of problem loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on The Peoples Bank of Georgia's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing 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.

On Bankrate's earnings test, The Peoples Bank of Georgia scored 16 out of a possible 30, better than the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The Peoples Bank of Georgia's most recent annualized quarterly return on equity was 7.72 percent, below the national average of 8.10 percent.

The bank reported net income of $507,000 on total equity of $7.0 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.