Safe and Sound

Citizens' Bank, Inc.

Robertsdale, AL
4
Star Rating
Started in 1981, Citizens' Bank, Inc. is an FDIC-insured bank headquartered in Robertsdale, AL. The bank has equity of $12.2 million on assets of $109.8 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 34 full-time employees in 3 offices in AL, the bank has amassed loans and leases worth $68.2 million, $56.8 million of which are for real estate. The bank currently holds $97.1 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Citizens' Bank, Inc. exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank fared on the three major criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial strength. It works as a bulwark against losses and provides protection for depositors during periods of economic instability for the bank. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, Citizens' Bank, Inc. achieved a score of 14 out of a possible 30 points, better than the national average of 13.13.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Citizens' Bank, Inc.'s Tier 1 capital ratio was 18.23 percent, higher than the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic difficulties.

Overall, Citizens' Bank, Inc. held equity amounting to 11.07 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

Having extensive holdings of these kinds of assets may eventually require a bank to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, decreasing earnings and elevating the chances of a failure in the future.

On Bankrate's test of asset quality, Citizens' Bank, Inc. scored 36 out of a possible 40 points, failing to reach the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 0.10 percent of Citizens' 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 below the national average of 1.01 percent.

Banks keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." That reserve's size can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Citizens' Bank, Inc.'s loan loss allowance was 1,559.42 percent of its total noncurrent loans, exceeding the national average. All things being equal, a higher ratio of loan loss allowance to noncurrent loans is better.

Earnings score

How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand economic trouble. Banks that are losing money, however, are less able to do those things.

Citizens' Bank, Inc. scored 12 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for Citizens' Bank, Inc. was 5.18 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $619,000 on total equity of $12.2 million. The bank reported an annualized return on average assets, or ROA, of 0.57 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.