Safe and Sound

State Bank of Cazenovia

Cazenovia, WI
5
Star Rating
State Bank of Cazenovia is an FDIC-insured bank started in 1906 and currently based in Cazenovia, WI. As of June 30, 2017, the bank held equity of $6.4 million on assets of $34.6 million.

With 9 full-time employees in 2 offices in WI, the bank has amassed loans and leases worth $16.9 million, including real estate loans of $11.9 million. U.S. bank customers currently have $28.1 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, State Bank of Cazenovia exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank faired on the three major criteria Bankrate used to evaluate American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for depositors when a bank is struggling financially. It follows then that when it comes to measuring an a bank's financial stability, capital is important. From a safety and soundness perspective, the higher the capital, the better.
State Bank of Cazenovia beat out the national average of 13.38 points on our test to measure capital adequacy, achieving a score of 28 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. State Bank of Cazenovia's Tier 1 capital ratio was 39.68 percent, higher than the 6 percent level regulators consider adequate, and higher than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather financial challenges.

Overall, State Bank of Cazenovia held equity amounting to 18.63 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due loans.

Having lots of these types of assets may eventually require a bank to use capital to cover losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, State Bank of Cazenovia scored 40 out of a possible 40 points, exceeding the national average of 37.62 points.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 1.41 percent of State Bank of Cazenovia's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 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 helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on State Bank of Cazenovia's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Losses, on the other hand, reduce a bank's ability to do those things.

State Bank of Cazenovia fell short of the national average on Bankrate's earnings test, achieving a score of 6 out of a possible 30.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for State Bank of Cazenovia was 2.72 percent, below the national average of 9.28 percent.

The bank recorded net income of $87,000 on total equity of $6.4 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.49 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.