Safe and Sound

City National Bank of West Virginia

Charleston, WV
5
Star Rating
City National Bank of West Virginia is a Charleston, WV-based, FDIC-insured bank founded in 1957. The bank has equity of $407.3 million on assets of $4.07 billion, according to December 31, 2017, regulatory filings.

U.S. bank customers have $3.37 billion on deposit at 86 offices in multiple states run by 841 full-time employees. With that footprint, the bank has amassed loans and leases worth $3.11 billion, including real estate loans of $2.87 billion.

Overall, Bankrate believes that, as of December 31, 2017, City National Bank of West Virginia exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three major criteria Bankrate used to evaluate U.S. banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for depositors during times of economic instability for the bank. Therefore, when it comes to measuring an an institution's financial stability, capital is key. From a safety and soundness perspective, the more capital, the better.

City National Bank of West Virginia fell below the national average of 13.13 on our test to measure capital adequacy, racking up 8 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. City National Bank of West Virginia's Tier 1 capital ratio was 11.99 percent, higher than the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic headwinds.

Overall, City National Bank of West Virginia held equity amounting to 10.00 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

A bank with lots of these types of assets may eventually be required to use capital to absorb losses, decreasing its cushion of equity. 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 increasing the chances of a future failure.

City National Bank of West Virginia scored above the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 0.34 percent of City National Bank of West Virginia'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 known as an "allowance for loan and lease losses" to deal with troubled assets . That reserve's size can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on City National Bank of West Virginia's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand financial shocks. Banks that are losing money, however, are less able to do those things.

City National Bank of West Virginia scored 22 out of a possible 30 on Bankrate's earnings test, above 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 total equity. City National Bank of West Virginia's most recent annualized quarterly return on equity was 13.36 percent, above the national average of 8.10 percent.

The bank recorded net income of $54.2 million on total equity of $407.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.35 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.