Safe and Sound

Ojai Community Bank

Ojai, CA
4
Star Rating
Ojai Community Bank is an FDIC-insured bank founded in 2005 and currently headquartered in Ojai, CA. The bank has equity of $24.8 million on $275,292,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the work of 47 full-time employees in 4 offices in CA, the bank has amassed loans and leases worth $206.7 million, including $182.4 million worth of real estate loans. U.S. bank customers currently have $229.9 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Ojai Community Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank faired on the three key criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial fortitude, capital is important. It works as a cushion against losses and as protection for depositors when a bank is struggling financially. When looking at safety and soundness, more capital is preferred.
Ojai Community Bank received a score of 10 out of a possible 30 points on our test to measure capital adequacy, coming in below the national average of 13.38.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Ojai Community Bank's Tier 1 capital ratio was 11.18 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to economic downturns.

Overall, Ojai Community Bank held equity amounting to 9.02 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with extensive holdings of these kinds of assets could eventually be required to use capital to absorb losses, cutting down on its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, diminishing earnings and increasing the chances of a future failure.

On Bankrate's asset quality test, Ojai Community Bank scored 36 out of a possible 40 points, below the national average of 37.62 points.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, none of Ojai Community Bank'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 1.04 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the the size of that reserve to the total amount of problem loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Ojai Community Bank'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, expanding 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.

Ojai Community Bank did below-average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.

One widely used measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Ojai Community Bank's most recent annualized quarterly return on equity was 7.84 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $957,000 on total equity of $24.8 million. The bank reported an annualized return on average assets, or ROA, of 0.72 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 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.