Safe and Sound

CB&S Bank, Inc.

Russellville, AL
4
Star Rating
Russellville, AL-based CB&S Bank, Inc. is an FDIC-insured bank started in 1906. As of December 31, 2017, the bank had equity of $192.8 million on assets of $1.60 billion.

Thanks to the work of 529 full-time employees in 55 offices in multiple states, the bank has amassed loans and leases worth $710.3 million, including $579.5 million worth of real estate loans. U.S. bank customers currently have $1.28 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, CB&S Bank, Inc. exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to evaluate U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is valuable. It works as a bulwark against losses and affords protection for depositors during times of economic instability for the bank. When looking at safety and soundness, the higher the capital, the better.

CB&S Bank, Inc. beat out the national average of 13.13 points on our test to measure capital adequacy, scoring 14 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. CB&S Bank, Inc.'s Tier 1 capital ratio was 18.51 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to financial challenges.

Overall, CB&S Bank, Inc. held equity amounting to 12.06 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

Having extensive holdings of these types of assets may eventually require a bank to use capital to absorb losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

CB&S Bank, Inc. finished below the national average of 37.49 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 2.18 percent of CB&S Bank, Inc.'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 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the reserve's size to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on CB&S Bank, Inc.'s loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.

CB&S Bank, Inc. did below-average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.

One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. The most recent annualized quarterly return on equity for CB&S Bank, Inc. was 5.91 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $11.2 million on total equity of $192.8 million. The bank reported an annualized return on average assets, or ROA, of 0.69 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.