Safe and Sound

CBC NATIONAL BANK

Fernandina Beach, FL
5
Star Rating
CBC NATIONAL BANK is a Fernandina Beach, FL-based, FDIC-insured bank dating back to 2000. Regulatory filings show the bank having equity of $73.3 million on assets of $604.7 million, as of December 31, 2017.

Thanks to the efforts of 470 full-time employees in 9 offices in multiple states, the bank holds loans and leases worth $526.7 million, including real estate loans of $504.3 million. The bank currently holds $428.8 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, CBC NATIONAL BANK exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three key criteria Bankrate used to grade American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for depositors when a bank is experiencing economic trouble. Therefore, a bank's level of capital is a useful measurement of a bank's financial strength. When looking at safety and soundness, the higher the capital, the better.

CBC NATIONAL BANK scored 14 out of a possible 30 points on our test to measure the adequacy of a bank's capital, beating out the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. CBC NATIONAL BANK's Tier 1 capital ratio was 24.02 percent, higher than the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather financial difficulties.

Overall, CBC NATIONAL BANK held equity amounting to 12.12 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid loans.

Having a large number of these types of assets may eventually force a bank to use capital to cover losses, cutting down on its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, pushing down earnings and elevating the risk of a future failure.

On Bankrate's asset quality test, CBC NATIONAL BANK scored 36 out of a possible 40 points, falling short of the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 0.66 percent of CBC NATIONAL 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 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the reserve's size 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 CBC NATIONAL BANK's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand financial trouble. Conversely, losses lessen a bank's ability to do those things.

On Bankrate's earnings test, CBC NATIONAL BANK scored 20 out of a possible 30, above the national average of 15.12.

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 CBC NATIONAL BANK was 11.93 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $8.3 million on total equity of $73.3 million. The bank experienced an annualized return on average assets, or ROA, of 1.38 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.