Safe and Sound

The Cincinnatus Savings & Loan Co.

Cincinnati, OH
5
Star Rating
Cincinnati, OH-based The Cincinnatus Savings & Loan Co. is an FDIC-insured bank started in 1885. As of December 31, 2017, the bank held equity of $20.9 million on $88.4 million in assets.

U.S. bank customers have $62.1 million on deposit at 3 offices in OH run by 27 full-time employees. With that footprint, the bank holds loans and leases worth $72.7 million, $72.4 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, The Cincinnatus Savings & Loan Co. exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three major criteria Bankrate used to score U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a bank's financial resilience. It acts as a buffer against losses and affords protection for depositors when a bank is struggling financially. From a safety and soundness perspective, the higher the capital, the better.

The Cincinnatus Savings & Loan Co. scored 30 out of a possible 30 points on our test to measure the adequacy of a bank's capital, above the national average of 13.13.

One essential measure of this buffer is a bank's Tier 1 capital ratio. The Cincinnatus Savings & Loan Co.'s Tier 1 capital ratio was 36.53 percent, higher than the 6 percent level regulators consider adequate, and higher than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to financial difficulties.

Overall, The Cincinnatus Savings & Loan Co. held equity amounting to 23.69 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid loans, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these types of assets means a bank could eventually have to use capital to absorb losses, decreasing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, diminishing earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, The Cincinnatus Savings & Loan Co. scored 40 out of a possible 40 points, exceeding the national average of 37.49 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.42 percent of The Cincinnatus Savings & Loan Co.'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 to handle troubled assets known as an "allowance for loan and lease losses." The size of that reserve can be a widely used indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on The Cincinnatus Savings & Loan Co.'s loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Losses, on the other hand, diminish a bank's ability to do those things.

The Cincinnatus Savings & Loan Co. fell behind the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.

One widely used way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The Cincinnatus Savings & Loan Co.'s most recent annualized quarterly return on equity was 1.66 percent, below the national average of 8.10 percent.

The bank reported net income of $344,000 on total equity of $20.9 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.41 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.