Safe and Sound

Citizens Community Federal National Association

Altoona, WI
4
Star Rating
Altoona, WI-based Citizens Community Federal National Association is an FDIC-insured bank started in 2001. The bank holds equity of $72.5 million on assets of $665.5 million, according to June 30, 2017, regulatory filings.

With 143 full-time employees in 14 offices in multiple states, the bank currently holds loans and leases worth $514.6 million, including real estate loans of $326.7 million. U.S. bank customers currently have $523.4 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Citizens Community Federal National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank did on the three major criteria Bankrate used to score American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial fortitude, capital is essential. It works as a buffer against losses and provides protection for depositors during times of economic instability for the bank. From a safety and soundness perspective, the more capital, the better.
Citizens Community Federal National Association 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 essential measure of this buffer is a bank's Tier 1 capital ratio. Citizens Community Federal National Association's Tier 1 capital ratio was 14.18 percent, exceeding the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather financial headwinds.

Overall, Citizens Community Federal National Association held equity amounting to 10.89 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid mortgages.

Having lots of these types of assets may eventually force a bank to use capital to absorb losses, reducing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, diminishing earnings and elevating the risk of a failure in the future.

Citizens Community Federal National Association scored 36 out of a possible 40 points on Bankrate's test of asset quality, falling short of the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of June 30, 2017, 1.29 percent of Citizens Community Federal National Association'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Citizens Community Federal National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

Citizens Community Federal National Association underperformed the average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Citizens Community Federal National Association was 7.13 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $2.5 million on total equity of $72.5 million. The bank reported an annualized return on average assets, or ROA, of 0.76 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.