Safe and Sound

First Bank of Ohio

Tiffin, OH
5
Star Rating
First Bank of Ohio is a Tiffin, OH-based, FDIC-insured bank dating back to 1873. As of June 30, 2017, the bank held equity of $66.3 million on assets of $173.8 million.

With 43 full-time employees in 5 offices in OH, the bank currently holds loans and leases worth $90.1 million, including real estate loans of $172,000. U.S. bank customers currently have $106.6 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, First Bank of Ohio exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank faired on the three important criteria Bankrate used to grade American banks on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for depositors when a bank is experiencing financial trouble. It follows then that a bank's level of capital is a useful measurement of a bank's financial resilience. When looking at safety and soundness, more capital is better.
First Bank of Ohio scored 30 out of a possible 30 points on our test to measure the adequacy of a bank's capital, above the national average of 13.38.

One important measure of this buffer is a bank's Tier 1 capital ratio. First Bank of Ohio's Tier 1 capital ratio was 55.53 percent, exceeding the 6 percent level considered adequate by regulators, and higher than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial difficulties.

Overall, First Bank of Ohio held equity amounting to 38.13 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as unpaid loans, on the bank's loan loss reserves and overall capitalization.

A bank with a large number of these types of assets may eventually have to use capital to cover losses, decreasing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a future failure.

First Bank of Ohio scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than 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, 0.50 percent of First Bank of Ohio'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the the size of that reserve to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on First Bank of Ohio's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.

First Bank of Ohio received below-average marks on Bankrate's earnings test, achieving a score of 8 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. The most recent annualized quarterly return on equity for First Bank of Ohio was 3.36 percent, below the national average of 9.28 percent.

The bank earned net income of $1.1 million on total equity of $66.3 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.26 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.