Safe and Sound

Citizens State Bank of Tyler, Incorporated

Tyler, MN
3
Star Rating
Citizens State Bank of Tyler, Incorporated is a Tyler, MN-based, FDIC-insured bank founded in 1917. Regulatory filings show the bank having equity of $2.0 million on $23.5 million in assets, as of December 31, 2017.

Thanks to the efforts of 5 full-time employees, the bank currently holds loans and leases worth $5.0 million, including $1.8 million worth of real estate loans. The bank currently holds $21.5 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Citizens State Bank of Tyler, Incorporated exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three major criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is valuable. It works as a buffer against losses and as protection for depositors when a bank is struggling financially. When looking at safety and soundness, the more capital, the better.

Citizens State Bank of Tyler, Incorporated received a score of 8 out of a possible 30 points on our test to measure capital adequacy, lower than the national average of 13.13.

A bank's Tier 1 capital ratio is an important measure of this buffer. Citizens State Bank of Tyler, Incorporated's Tier 1 capital ratio was 31.08 percent, above the 6 percent level regulators consider adequate, and exceeding the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial headwinds.

Overall, Citizens State Bank of Tyler, Incorporated held equity amounting to 8.64 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid mortgages.

Having a large number of these kinds of assets could eventually require a bank to use capital to cover losses, decreasing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

Citizens State Bank of Tyler, Incorporated scored 36 out of a possible 40 points on Bankrate's asset quality test, falling short of the national average of 37.49.

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, 4.10 percent of Citizens State Bank of Tyler, Incorporated's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above 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 . That reserve's size can be a widely used 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 State Bank of Tyler, Incorporated's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.

On Bankrate's test of earnings, Citizens State Bank of Tyler, Incorporated scored 8 out of a possible 30, coming in below the national average of 15.12.

One widely used way to measure 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 State Bank of Tyler, Incorporated was 3.83 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $77,000 on total equity of $2.0 million. The bank reported an annualized return on average assets, or ROA, of 0.34 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.