Safe and Sound

Citizens Tri-County Bank

Dunlap, TN
5
Star Rating
Dunlap, TN-based Citizens Tri-County Bank is an FDIC-insured bank started in 1972. Regulatory filings show the bank having equity of $83.9 million on $816,388,000 in assets, as of June 30, 2017.

Thanks to the efforts of 265 full-time employees in 25 offices in TN, the bank holds loans and leases worth $459.2 million, including $372.2 million worth of real estate loans. The bank currently holds $725.9 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Citizens Tri-County Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank faired on the three important criteria Bankrate used to evaluate U.S. banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial strength, capital is essential. It acts as a buffer against losses and affords protection for depositors during periods of economic trouble for the bank. When looking at safety and soundness, the higher the capital, the better.
Citizens Tri-County Bank received a score of 10 out of a possible 30 points on our test to measure capital adequacy, falling short of the national average of 13.38.

A bank's Tier 1 capital ratio is an essential measure of this buffer. Citizens Tri-County Bank's Tier 1 capital ratio was 18.22 percent, exceeding the 6 percent level considered adequate by regulators, but below the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather financial challenges.

Overall, Citizens Tri-County Bank held equity amounting to 10.28 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

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

A bank with extensive holdings of these kinds of assets may eventually be required to use capital to absorb losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, pushing down earnings and increasing the risk of a future failure.

Citizens Tri-County Bank scored below the national average of 37.62 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 1.36 percent of Citizens Tri-County Bank's loans were noncurrent, meaning 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 to deal with troubled assets known as an "allowance for loan and lease losses." The size of that reserve can be a useful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Citizens Tri-County Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

Citizens Tri-County Bank scored 24 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 16.52.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for Citizens Tri-County Bank was 15.35 percent, above the national average of 9.28 percent.

The bank earned net income of $6.3 million on total equity of $83.9 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.55 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.