Safe and Sound

Town & Country Bank

Saint George, UT
3
Star Rating
Town & Country Bank is an FDIC-insured bank started in 2008 and currently based in Saint George, UT. As of June 30, 2017, the bank held equity of $14.5 million on assets of $149.5 million.

Thanks to the efforts of 30 full-time employees in 2 offices in UT, the bank currently holds loans and leases worth $111.7 million, $81.9 million of which are for real estate. U.S. bank customers currently have $126.2 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Town & Country Bank exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three important criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of a bank's financial resilience. It works as a bulwark against losses and provides protection for accountholders when a bank is struggling financially. From a safety and soundness perspective, the more capital, the better.
Town & Country Bank received a score of 10 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Town & Country Bank's Tier 1 capital ratio was 10.03 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial downturns.

Overall, Town & Country Bank held equity amounting to 9.69 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

Having lots of these types of assets suggests a bank could eventually have to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, Town & Country Bank scored 20 out of a possible 40 points, failing to reach the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, 5.49 percent of Town & Country Bank'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 1.04 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the the size of that reserve to the total amount of problematic 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 Town & Country Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.

On Bankrate's test of earnings, Town & Country Bank scored 8 out of a possible 30, less than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. Town & Country Bank's most recent annualized quarterly return on equity was 3.45 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $244,000 on total equity of $14.5 million. The bank reported an annualized return on average assets, or ROA, of 0.36 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 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.