Safe and Sound

Citizens Savings Bank and Trust Company

Nashville, TN
1
Star Rating
Nashville, TN-based Citizens Savings Bank and Trust Company is an FDIC-insured bank started in 1904. As of June 30, 2017, the bank had equity of $9.5 million on assets of $106.7 million.

Thanks to the efforts of 29 full-time employees in 4 offices in TN, the bank holds loans and leases worth $90.4 million, including $87.0 million worth of real estate loans. U.S. bank customers currently have $92.9 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Citizens Savings Bank and Trust Company exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three key criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of a bank's financial resilience. It works as a cushion against losses and as protection for depositors when a bank is experiencing economic trouble. From a safety and soundness perspective, the higher the capital, the better.
On our test to measure capital adequacy, Citizens Savings Bank and Trust Company received a score of 8 out of a possible 30 points, coming in below the national average of 13.38.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Citizens Savings Bank and Trust Company's Tier 1 capital ratio was 8.84 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial downturns.

Overall, Citizens Savings Bank and Trust Company held equity amounting to 8.92 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 effect of troubled assets, such as past-due mortgages, on the bank's capitalization and allocated loan loss reserves.

A bank with large numbers of these kinds of assets may eventually be required to use capital to cover losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a future failure.

Citizens Savings Bank and Trust Company scored below the national average of 37.62 on Bankrate's test of asset quality, racking up 16 out of a possible 40 points .

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, 5.11 percent of Citizens Savings Bank and Trust Company'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 troubled assets . Comparing the the size of that reserve to the total amount of problem loans can be a useful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Citizens Savings Bank and Trust Company's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money are less able to do those things.

Citizens Savings Bank and Trust Company did below-average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.

One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Citizens Savings Bank and Trust Company's most recent annualized quarterly return on equity was 1.34 percent, below the national average of 9.28 percent.

The bank reported net income of $63,000 on total equity of $9.5 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.12 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.