NEW YORK--(EON: Enhanced Online News)--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 to Durant, Oklahoma based Durant Bancorp, Inc. (“Durant” or “the Company”). Moreover, KBRA has assigned deposit and senior unsecured debt ratings of BBB+, a subordinated debt rating of BBB, and short-term debt and deposit ratings of K2 to the subsidiary bank, First United Bank and Trust Company. The outlook on all long-term ratings is stable.
Durant’s ratings are supported by consistent earnings performance, strong liquidity position and noninterest revenue base, and an efficient enterprise risk management framework. The ratings also reflect Durant’s experienced management team and dynamic markets of operation, which combine metropolitan and rural expansion opportunities. Ratings are primarily constrained by a high concentration in construction and development loans, as well as in real estate loans, and moderately above average Texas ratio, though notable improvements have been made in this regard since 2010. Secondary constraints to the ratings include the Company’s exposure to geographic concentration risks, and above average efficiency ratio. Moreover, merger integration risks are present with the relatively large-scale acquisition of North American Bancshares, Inc. (NAB), though deal rationale is sensible and the NAB is located in a contiguous market.
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).