Safe and Sound

Citizens State Bank and Trust Co., Ellsworth, Kansas

Ellsworth, KS
5
Star Rating
Ellsworth, KS-based Citizens State Bank and Trust Co., Ellsworth, Kansas is an FDIC-insured bank started in 1900. As of December 31, 2017, the bank had equity of $17.4 million on $189.5 million in assets.

U.S. bank customers have $146.7 million on deposit at 6 offices in KS run by 52 full-time employees. With that footprint, the bank holds loans and leases worth $102.3 million, $72.4 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, Citizens State Bank and Trust Co., Ellsworth, Kansas 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 important criteria Bankrate used to score U.S. banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial resilience, capital is useful. It acts as a bulwark against losses and affords protection for depositors when a bank is struggling financially. When it comes to safety and soundness, the more capital, the better.

Citizens State Bank and Trust Co., Ellsworth, Kansas fell below the national average of 13.13 on our test to measure capital adequacy, racking up 8 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Citizens State Bank and Trust Co., Ellsworth, Kansas's Tier 1 capital ratio was 14.29 percent, higher than the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather economic challenges.

Overall, Citizens State Bank and Trust Co., Ellsworth, Kansas held equity amounting to 9.18 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with a large number of these kinds of assets may eventually have to use capital to absorb losses, cutting down on its equity cushion. 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, decreasing earnings and elevating the risk of a failure in the future.

Citizens State Bank and Trust Co., Ellsworth, Kansas scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 37.49.

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, 0.74 percent of Citizens State Bank and Trust Co., Ellsworth, Kansas'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . The size of that reserve can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Citizens State Bank and Trust Co., Ellsworth, Kansas's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its long-term survivability. 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 trouble. Conversely, losses reduce a bank's ability to do those things.

Citizens State Bank and Trust Co., Ellsworth, Kansas received above-average marks on Bankrate's earnings test, achieving a score of 22 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important measure of a bank's earnings. Citizens State Bank and Trust Co., Ellsworth, Kansas's most recent annualized quarterly return on equity was 12.15 percent, above the national average of 8.10 percent.

The bank reported net income of $2.1 million on total equity of $17.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.14 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.