Safe and Sound

The Citizens State Bank at Mohall

Mohall, ND
5
Star Rating
Started in 1915, The Citizens State Bank at Mohall is an FDIC-insured bank based in Mohall, ND. Regulatory filings show the bank having equity of $6.4 million on assets of $61.2 million, as of December 31, 2017.

Thanks to the efforts of 10 full-time employees in 3 offices in ND, the bank has amassed loans and leases worth $45.6 million, including $22.8 million worth of real estate loans. The bank currently holds $48.3 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, The Citizens State Bank at Mohall exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three key criteria Bankrate used to score 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 cushion against losses and as protection for depositors when a bank is experiencing economic trouble. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, The Citizens State Bank at Mohall received a score of 12 out of a possible 30 points, less than the national average of 13.13.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. The Citizens State Bank at Mohall's Tier 1 capital ratio was 13.88 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic downturns.

Overall, The Citizens State Bank at Mohall held equity amounting to 10.41 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as past-due mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets means a bank may eventually have to use capital to absorb losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, pushing down earnings and elevating the chances of a future failure.

On Bankrate's test of asset quality, The Citizens State Bank at Mohall scored 36 out of a possible 40 points, lower than the national average of 37.49 points.

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, 1.15 percent of The Citizens State Bank at Mohall'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 1.01 percent.

Banks keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." 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 problem loans. Unfortunately, the FDIC did not provide information on The Citizens State Bank at Mohall's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the bank better able to withstand financial trouble. Obviously, banks that are losing money are less able to do those things.

The Citizens State Bank at Mohall scored 22 out of a possible 30 on Bankrate's earnings test, better than the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for The Citizens State Bank at Mohall was 12.50 percent, above the national average of 8.10 percent.

The bank reported net income of $780,000 on total equity of $6.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.24 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.