Safe and Sound

Citizens Bank and Trust Company of Ardmore

Ardmore, OK
5
Star Rating
Founded in 1978, Citizens Bank and Trust Company of Ardmore is an FDIC-insured bank based in Ardmore, OK. The bank has equity of $19.8 million on $219.0 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 49 full-time employees in 4 offices in OK, the bank has amassed loans and leases worth $148.8 million, $117.5 million of which are for real estate. The bank currently holds $165.7 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Citizens Bank and Trust Company of Ardmore exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three major criteria Bankrate used to evaluate American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for depositors during periods of financial trouble for the bank. It follows then that a bank's level of capital is a crucial measurement of a bank's financial resilience. When looking at safety and soundness, the more capital, the better.

Citizens Bank and Trust Company of Ardmore came in below the national average of 13.13 on our test to measure capital adequacy, racking up 10 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Citizens Bank and Trust Company of Ardmore's Tier 1 capital ratio was 13.41 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial downturns.

Overall, Citizens Bank and Trust Company of Ardmore held equity amounting to 9.06 percent of its assets, which was lower than 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 mortgages, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these kinds of assets means a bank could eventually have to use capital to cover losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and elevating the chances of a future failure.

Citizens Bank and Trust Company of Ardmore exceeded the national average of 37.49 on Bankrate's test of asset quality, racking up 40 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, none of Citizens Bank and Trust Company of Ardmore'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 maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." The size of that reserve can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Citizens Bank and Trust Company of Ardmore's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand economic trouble. Conversely, losses diminish a bank's ability to do those things.

Citizens Bank and Trust Company of Ardmore scored 22 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 15.12.

One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for Citizens Bank and Trust Company of Ardmore was 12.07 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $2.4 million on total equity of $19.8 million. The bank experienced an annualized return on average assets, or ROA, of 1.13 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.