Safe and Sound

Citizens National Bank of Crosbyton

Crosbyton, TX
5
Star Rating
Crosbyton, TX-based Citizens National Bank of Crosbyton is an FDIC-insured bank founded in 1907. As of December 31, 2017, the bank held equity of $7.7 million on $46.8 million in assets.

Thanks to the work of 9 full-time employees, the bank has amassed loans and leases worth $18.5 million, including $7.1 million worth of real estate loans. The bank currently holds $39.0 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Citizens National Bank of Crosbyton exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank did on the three key criteria Bankrate used to score American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts 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 an institution's financial resilience. When it comes to safety and soundness, more capital is better.

Citizens National Bank of Crosbyton exceeded the national average of 13.13 points on our test to measure capital adequacy, racking up 24 out of a possible 30 points.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Citizens National Bank of Crosbyton's Tier 1 capital ratio was 39.27 percent, exceeding the 6 percent level considered adequate by regulators, and above the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic difficulties.

Overall, Citizens National Bank of Crosbyton held equity amounting to 16.50 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as unpaid loans.

Having large numbers of these kinds of assets suggests a bank could eventually have to use capital to cover losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in diminished earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, Citizens National Bank of Crosbyton scored 40 out of a possible 40 points, exceeding the national average of 37.49 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.01 percent of Citizens National Bank of Crosbyton'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 known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the size of that reserve to the total amount of at-risk loans can be a useful indicator when evaluating a bank's ability to manage troubled assets. Citizens National Bank of Crosbyton's loan loss allowance was 19,700.00 percent of its total noncurrent loans, above the national average. All else being equal, a higher ratio of loan loss allowance to noncurrent loans is better.

Earnings score

A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand economic shocks. Conversely, losses take away from a bank's ability to do those things.

On Bankrate's test of earnings, Citizens National Bank of Crosbyton scored 14 out of a possible 30, lower than the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. Citizens National Bank of Crosbyton's most recent annualized quarterly return on equity was 6.38 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $483,000 on total equity of $7.7 million. The bank had an annualized return on average assets, or ROA, of 1.02 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.