Safe and Sound

The Perryton National Bank

Perryton, TX
5
Star Rating
Started in 1921, The Perryton National Bank is an FDIC-insured bank based in Perryton, TX. Regulatory filings show the bank having equity of $21.0 million on assets of $172.5 million, as of December 31, 2017.

With 21 full-time employees, the bank holds loans and leases worth $57.5 million, including real estate loans of $20.8 million. U.S. bank customers currently have $151.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Perryton National Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three major criteria Bankrate used to score U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for depositors when a bank is experiencing financial trouble. It follows then that a bank's level of capital is a useful measurement of an institution's financial fortitude. When looking at safety and soundness, the higher the capital, the better.

The Perryton National Bank beat out the national average of 13.13 points on our test to measure capital adequacy, racking up 16 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. The Perryton National Bank's Tier 1 capital ratio was 28.47 percent, higher than the 6 percent level regulators consider adequate, and higher than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic challenges.

Overall, The Perryton National Bank held equity amounting to 12.16 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 capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due loans.

Having extensive holdings of these kinds of assets means a bank could have to use capital to cover 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, resulting in lower earnings and potentially more risk of a future failure.

The Perryton National Bank scored 36 out of a possible 40 points on Bankrate's asset quality test, failing to reach the national average of 37.49.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 2.69 percent of The Perryton National 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." How large that reserve is can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on The Perryton National Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.

The Perryton National Bank received above-average marks on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.

One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for The Perryton National Bank was 10.80 percent, above the national average of 8.10 percent.

The bank recorded net income of $2.2 million on total equity of $21.0 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.31 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.