Safe and Sound

The Baltic State Bank

Baltic, OH
5
Star Rating
The Baltic State Bank is an FDIC-insured bank founded in 1902 and currently based in Baltic, OH. Regulatory filings show the bank having equity of $5.8 million on $53,590,000 in assets, as of June 30, 2017.

With 16 full-time employees in 3 offices in OH, the bank holds loans and leases worth $42.9 million, including real estate loans of $36.7 million. U.S. bank customers currently have $47.7 million in deposits with the bank.

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

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for depositors during times of economic trouble for the bank. It follows then that a bank's level of capital is a crucial measurement of a bank's financial fortitude. From a safety and soundness perspective, the more capital, the better.
The Baltic State Bank fell short of the national average of 13.38 on our test to measure the adequacy of a bank's capital, scoring 12 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. The Baltic State Bank's Tier 1 capital ratio was 20.36 percent, higher than the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather financial headwinds.

Overall, The Baltic State Bank held equity amounting to 10.83 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these types of assets could eventually require a bank to use capital to cover losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, pushing down earnings and increasing the chances of a future failure.

The Baltic State Bank scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 37.62.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, none of The Baltic State Bank's loans were noncurrent, meaning 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 handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on The Baltic State Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank better able to withstand economic shocks. Losses, on the other hand, reduce a bank's ability to do those things.

On Bankrate's test of earnings, The Baltic State Bank scored 20 out of a possible 30, better than the national average of 16.52.

One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The Baltic State Bank's most recent annualized quarterly return on equity was 11.71 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $333,000 on total equity of $5.8 million. The bank had an annualized return on average assets, or ROA, of 1.27 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.