Safe and Sound

First Citizens Bank of Polson, National Association

Polson, MT
NR
Star Rating
Polson, MT-based First Citizens Bank of Polson, National Association is an FDIC-insured bank started in 1974. The bank holds equity of $784,000 on assets of $17.5 million, according to December 31, 2017, regulatory filings.

With 8 full-time employees, the bank currently holds loans and leases worth $12.0 million, including real estate loans of $9.5 million. U.S. bank customers currently have $16.6 million in deposits with the bank.

Overall, Bankrate did not have enough information on this institution to give it a star rating. Keep reading for an analysis of how the bank did on the three key criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial strength, capital is key. It acts as a buffer against losses and as protection for accountholders when a bank is experiencing financial instability. When looking at safety and soundness, the higher the capital, the better.

First Citizens Bank of Polson, National Association fell short of the national average of 13.13 on our test to measure capital adequacy, scoring 0 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. First Citizens Bank of Polson, National Association's Tier 1 capital ratio was 7.32 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial headwinds.

Overall, First Citizens Bank of Polson, National Association held equity amounting to 4.49 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as past-due mortgages, on the bank's capitalization and allocated loan loss reserves.

A bank with lots of these kinds of assets may eventually be forced to use capital to cover losses, reducing 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 money, resulting in diminished earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, First Citizens Bank of Polson, National Association scored 0 out of a possible 40 points, less than the national average of 37.49 points.

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, 4.23 percent of First Citizens Bank of Polson, National Association'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 keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on First Citizens Bank of Polson, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, First Citizens Bank of Polson, National Association scored 0 out of a possible 30, less than the national average of 15.12.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. First Citizens Bank of Polson, National Association's most recent annualized quarterly return on equity was -77.58 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $-960,000 on total equity of $784,000. The bank experienced an annualized return on average assets, or ROA, of -4.99 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.