Safe and Sound

The Citizens National Bank of Bluffton

Bluffton, OH
5
Star Rating
Bluffton, OH-based The Citizens National Bank of Bluffton is an FDIC-insured bank founded in 1920. The bank has equity of $77.0 million on $816.7 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 162 full-time employees in 11 offices in OH, the bank has amassed loans and leases worth $662.8 million, including $539.1 million worth of real estate loans. U.S. bank customers currently have $547.2 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Citizens National Bank of Bluffton exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three key criteria Bankrate used to grade American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial strength, capital is important. It acts as a bulwark against losses and affords protection for accountholders when a bank is struggling financially. When it comes to safety and soundness, more capital is better.

The Citizens National Bank of Bluffton received a score of 10 out of a possible 30 points on our test to measure capital adequacy, below the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. The Citizens National Bank of Bluffton's Tier 1 capital ratio was 10.73 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather financial downturns.

Overall, The Citizens National Bank of Bluffton held equity amounting to 9.43 percent of its assets, which was lower than the national average of 12.03 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 troubled assets, such as past-due mortgages.

A bank with lots of these kinds of assets may eventually have to use capital to absorb losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and elevating the chances of a failure in the future.

On Bankrate's asset quality test, The Citizens National Bank of Bluffton scored 36 out of a possible 40 points, less than the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 0.96 percent of The Citizens National Bank of Bluffton'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 deal with troubled assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of at-risk 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 National Bank of Bluffton'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, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.

The Citizens National Bank of Bluffton received above-average marks on Bankrate's test of earnings, achieving a score of 28 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for The Citizens National Bank of Bluffton was 20.49 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $15.1 million on total equity of $77.0 million. The bank experienced an annualized return on average assets, or ROA, of 1.89 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.