Safe and Sound

The Citizens National Bank of Quitman

Quitman, GA
4
Star Rating
The Citizens National Bank of Quitman is a Quitman, GA-based, FDIC-insured bank founded in 1934. Regulatory filings show the bank having equity of $12.4 million on assets of $101.6 million, as of December 31, 2017.

Thanks to the efforts of 21 full-time employees, the bank holds loans and leases worth $66.1 million, including real estate loans of $48.4 million. The bank currently holds $87.3 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, The Citizens National Bank of Quitman exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three key criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for depositors when a bank is struggling financially. Therefore, a bank's level of capital is a key measurement of an institution's financial resilience. When it comes to safety and soundness, the higher the capital, the better.

The Citizens National Bank of Quitman scored above the national average of 13.13 points on our test to measure capital adequacy, scoring 16 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. The Citizens National Bank of Quitman's Tier 1 capital ratio was 17.56 percent, exceeding the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic headwinds.

Overall, The Citizens National Bank of Quitman held equity amounting to 12.22 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand 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 force a bank to use capital to absorb losses, reducing its equity buffer. 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 future failure.

On Bankrate's asset quality test, The Citizens National Bank of Quitman scored 40 out of a possible 40 points, beating out 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, 1.10 percent of The Citizens National Bank of Quitman's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks keep a reserve to handle problem assets known as an "allowance for loan and lease losses." How large that reserve is can be a helpful 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 Citizens National Bank of Quitman's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its long-term survivability. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand financial shocks. Obviously, banks that are losing money are less able to do those things.

The Citizens National Bank of Quitman fell behind the national average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.

One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for The Citizens National Bank of Quitman was 5.18 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $648,000 on total equity of $12.4 million. The bank reported an annualized return on average assets, or ROA, of 0.65 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.