Safe and Sound

The Citizens Bank of Cochran

Cochran, GA
3
Star Rating
The Citizens Bank of Cochran is an FDIC-insured bank founded in 1934 and currently based in Cochran, GA. The bank has equity of $9.5 million on $87.6 million in assets, according to December 31, 2017, regulatory filings.

With 25 full-time employees in 2 offices in GA, the bank currently holds loans and leases worth $65.8 million, including real estate loans of $48.3 million. U.S. bank customers currently have $78.0 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Citizens Bank of Cochran exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three major criteria Bankrate used to score U.S. banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for depositors when a bank is experiencing economic instability. Therefore, when it comes to measuring an a bank's financial strength, capital is crucial. When it comes to safety and soundness, more capital is better.

The Citizens Bank of Cochran received a score of 12 out of a possible 30 points on our test to measure the adequacy of a bank's capital, less than the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. The Citizens Bank of Cochran's Tier 1 capital ratio was 14.39 percent, exceeding the 6 percent level considered adequate by regulators, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial headwinds.

Overall, The Citizens Bank of Cochran held equity amounting to 10.85 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

Having lots of these kinds of assets could eventually require a bank to use capital to cover losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, diminishing earnings and elevating the risk of a failure in the future.

The Citizens Bank of Cochran scored 36 out of a possible 40 points on Bankrate's test of asset quality, failing to reach the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 0.11 percent of The Citizens Bank of Cochran'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." 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 The Citizens Bank of Cochran's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.

On Bankrate's earnings test, The Citizens Bank of Cochran scored 0 out of a possible 30, failing to reach the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The Citizens Bank of Cochran's most recent annualized quarterly return on equity was -2.49 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $-244,000 on total equity of $9.5 million. The bank reported an annualized return on average assets, or ROA, of -0.30 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.