By LYDIA BERGLAR
Bank of Dade placed tenth in a ranking by “American Banker Magazine” of community banks with high returns on assets (ROA). This national recognition in the world of banking affirms Bank of Dade that their careful management is paying off.
The magazine noted the bank’s ROA and efficiency ratio, both of which have improved over the last several years.
Shannon Henry, president, CEO, and CFO of Bank of Dade, said, “All of this ties together to indicate a well-managed and well-run business. Our net income for 2022 was a new record in the history of the bank.”
Henry explained that different industries have different standards for a good ROA percentage. He reported, “As long as I’ve been in banking, 2% has always been a good mark to strive for. Historically, when you look at us against our peer group of similar sized banks in Georgia, we’ve always been ahead.”
“American Banker Magazine” included 1.94% as Bank of Dade’s ROA at the end of September 2022, but that number had risen to 1.99% by the end of the year. Bank of Dade’s peer group ROA was 1.07% at the end of 2022.
For context, the bank’s ROA was 1.85% in 2018 and dropped to 1.69% in 2020 before reaching just under 2%.
The magazine listed Bank of Dade’s efficiency ratio as 51.56 at the end of September 2022 but it had improved, reaching 50.02 by the end of 2022. Henry said, “Efficiency ratios are like golf scores; lower is better. A good goal is 60. It indicates how profitable we are.”
Efficiency ratios are calculated by dividing expenses by total revenue. Contributing largely to the improved efficiency ratio for Bank of Dade was an increase in loans. “We have about $74 million in loans and about $70 million in investments,” reported Henry, which creates the bank’s total assets of about $144 million.
He continued, “We had an over $20 million increase in loans from February 2021 to the end of 2022. We noticed a rise in construction loans and home purchases.” Henry also noted the rising home and construction costs.
For context, the bank’s efficiency ratio was 64.97 in 2018 and 56.56 in 2021 before reaching 50.02 by the end of 2022. Bank of Dade’s peer group efficiency ratio was 64.66 at the end of 2022.
Henry noted that small banks have some advantages that large, national banks don’t. First and foremost? Relationships. “Customers know the employees, and they can talk to the president of the bank,” he said. “It’s a completely different environment than walking into a national bank.”
He also noted the flexibility that Bank of Dade has because of their independence. “We don’t have to send loan requests to underwriters in Chattanooga. We make our own decisions. We have a small board. We’re not so strict on types of collateral. For example, we do mobile home loans. We offer services to serve this community that many bigger banks aren’t interested in doing.”
Henry believes that these numbers are the outcome of conservative, careful measures. “We try to keep our expenses down. I go out, negotiate, and get the best deal I can. We have really good benefits for our employees, but we don’t want to be careless with other expenses.”
The bank’s primary goal is service, with Henry saying, “I want our people, when they come in touch with a customer, to make a positive impact on them. We all live here, so we’re serving each other. We have employees who live on Sand Mountain, Lookout Mountain, Rising Fawn, Wildwood…our board members are all local.”
Henry began working as a teller at Bank of Dade in 2001 and became president in 2019. He recalls, “I was able to work in all of the different offices and functions. I think one thing that makes us strong internally is we always promote from within. Everybody here started as a teller.”
He concluded, “I feel like I’m here by the grace of God. I feel like I’m here for a reason.”