Safe and Sound

Citizens Savings Bank

Clarks Summit, PA
4
Star Rating
Started in 1902, Citizens Savings Bank is an FDIC-insured bank headquartered in Clarks Summit, PA. As of December 31, 2017, the bank held equity of $47.6 million on assets of $332.1 million.

U.S. bank customers have $282.3 million on deposit at 7 offices in PA run by 74 full-time employees. With that footprint, the bank holds loans and leases worth $252.1 million, including real estate loans of $252.4 million.

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

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of a bank's financial resilience. It works as a buffer against losses and affords protection for accountholders during times of economic trouble for the bank. From a safety and soundness perspective, the more capital, the better.

Citizens Savings Bank scored above the national average of 13.13 points on our test to measure the adequacy of a bank's capital, receiving a score of 20 out of a possible 30 points.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Citizens Savings Bank's Tier 1 capital ratio was 29.50 percent, above the 6 percent level considered adequate by regulators, and higher than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather financial headwinds.

Overall, Citizens Savings Bank held equity amounting to 14.32 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 loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

Having extensive holdings of these kinds of assets may eventually require a bank to use capital to absorb losses, reducing 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, diminishing earnings and elevating the chances of a failure in the future.

Citizens Savings Bank beat out the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 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, 0.43 percent of Citizens Savings 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 maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing how large that reserve is to the total amount of problematic loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Citizens Savings Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

Citizens Savings Bank scored 8 out of a possible 30 on Bankrate's test of earnings, coming in below 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 the total amount of equity. The most recent annualized quarterly return on equity for Citizens Savings Bank was 3.70 percent, below the national average of 8.10 percent.

The bank recorded net income of $1.7 million on total equity of $47.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.51 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.