NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) has assigned a senior unsecured debt rating of BBB, subordinated debt rating of BBB-, and short-term debt rating of K3 for Paragould, Arkansas based First Paragould Bankshares, Inc. In addition, KBRA assigned deposit and senior unsecured debt ratings of BBB+, a subordinated debt rating of BBB, and short-term deposit and debt ratings of K2 for its subsidiary, First National Bank (“the Bank”). The Outlook on all long-term ratings is Stable.
The ratings are supported by First National Bank’s notable performance throughout the financial crisis, maintenance of sound asset quality metrics and profitability, strong earnings metrics since the financial downturn, relatively stable capital position with an above average tangible common equity ratio, and a conservative management team with knowledge of local markets and key business lines. The ratings are primarily constrained by a significant concentration in agricultural lending, which is potentially volatile, although there have been negligible historical losses in the portfolio. Additionally, ratings are constrained by an elevated loan-to-deposit ratio, above average cost of funds, a liability sensitive balance sheet that exposes the Bank to interest rate risks, and potential governance issues given the ownership structure.
The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology published on February 19, 2016.
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About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).
