Safe and Sound

CNB Bank and Trust, N.A.

Carlinville, IL
4
Star Rating
CNB Bank and Trust, N.A. is an FDIC-insured bank started in 1888 and currently based in Carlinville, IL. Regulatory filings show the bank having equity of $83.8 million on $944.9 million in assets, as of December 31, 2017.

Thanks to the efforts of 204 full-time employees in 13 offices in multiple states, the bank holds loans and leases worth $708.0 million, $486.6 million of which are for real estate. The bank currently holds $820.7 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, CNB Bank and Trust, N.A. exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three major criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for account holders when a bank is experiencing financial instability. Therefore, when it comes to measuring an an institution's financial fortitude, capital is essential. When it comes to safety and soundness, more capital is preferred.

On our test to measure capital adequacy, CNB Bank and Trust, N.A. received a score of 8 out of a possible 30 points, falling short of the national average of 13.13.

A bank's Tier 1 capital ratio is an important measure of this buffer. CNB Bank and Trust, N.A.'s Tier 1 capital ratio was 10.93 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather financial downturns.

Overall, CNB Bank and Trust, N.A. held equity amounting to 8.86 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 problem assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these types of assets means a bank may have to use capital to cover losses, cutting down on its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the risk of a future failure.

On Bankrate's asset quality test, CNB Bank and Trust, N.A. scored 36 out of a possible 40 points, falling short of the national average of 37.49 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, 0.88 percent of CNB Bank and Trust, N.A.'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 problem assets . How large that reserve is can be a widely used 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 CNB Bank and Trust, N.A.'s loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.

On Bankrate's earnings test, CNB Bank and Trust, N.A. scored 20 out of a possible 30, above the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. CNB Bank and Trust, N.A.'s most recent annualized quarterly return on equity was 10.34 percent, above the national average of 8.10 percent.

The bank recorded net income of $8.4 million on total equity of $83.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.90 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.