Safe and Sound

CBC NATIONAL BANK

Fernandina Beach, FL
4
Star Rating
Started in 2000, CBC NATIONAL BANK is an FDIC-insured bank based in Fernandina Beach, FL. As of June 30, 2017, the bank had equity of $69.5 million on assets of $635.5 million.

U.S. bank customers have $433.8 million on deposit at 9 offices in multiple states run by 447 full-time employees. With that footprint, the bank currently holds loans and leases worth $551.0 million, including $527.5 million worth of real estate loans.

Overall, Bankrate believes that, as of June 30, 2017, CBC NATIONAL BANK exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three major criteria Bankrate used to grade U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for accountholders when a bank is struggling financially. It follows then that when it comes to measuring an an institution's financial stability, capital is important. When looking at safety and soundness, more capital is preferred.
CBC NATIONAL BANK received a score of 12 out of a possible 30 points on our test to measure the adequacy of a bank's capital, below the national average of 13.38.

One important measure of this buffer is a bank's Tier 1 capital ratio. CBC NATIONAL BANK's Tier 1 capital ratio was 20.20 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to economic headwinds.

Overall, CBC NATIONAL BANK held equity amounting to 10.93 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

Having lots of these kinds of assets means a bank may eventually have to use capital to absorb losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, resulting in reduced earnings and potentially more risk of a future failure.

CBC NATIONAL BANK scored 36 out of a possible 40 points on Bankrate's test of asset quality, coming in below the national average of 37.62.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.78 percent of CBC NATIONAL BANK's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks keep a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing the the size of that reserve to the total amount of problem 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 CBC NATIONAL BANK's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand economic trouble. Conversely, losses diminish a bank's ability to do those things.

CBC NATIONAL BANK did above-average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. CBC NATIONAL BANK's most recent annualized quarterly return on equity was 12.07 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $4.1 million on total equity of $69.5 million. The bank reported an annualized return on average assets, or ROA, of 1.40 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.