Safe and Sound

The City National Bank and Trust Company of Lawton, Oklahoma

Lawton, OK
5
Star Rating
The City National Bank and Trust Company of Lawton, Oklahoma is a Lawton, OK-based, FDIC-insured bank dating back to 1901. Regulatory filings show the bank having equity of $43.2 million on assets of $330.7 million, as of December 31, 2017.

With 407 full-time employees in 37 offices in multiple states, the bank has amassed loans and leases worth $185.1 million, including real estate loans of $155.5 million. U.S. bank customers currently have $275.0 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The City National Bank and Trust Company of Lawton, Oklahoma exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three major criteria Bankrate used to evaluate American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a bank's financial strength. It works as a buffer against losses and provides protection for accountholders during periods of financial instability for the bank. From a safety and soundness perspective, the higher the capital, the better.

The City National Bank and Trust Company of Lawton, Oklahoma racked up 18 out of a possible 30 points on our test to measure capital adequacy, beating out the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. The City National Bank and Trust Company of Lawton, Oklahoma's Tier 1 capital ratio was 24.50 percent, above 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 stand up to economic headwinds.

Overall, The City National Bank and Trust Company of Lawton, Oklahoma held equity amounting to 13.08 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with lots of these kinds of assets could eventually have to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, diminishing earnings and elevating the risk of a failure in the future.

On Bankrate's asset quality test, The City National Bank and Trust Company of Lawton, Oklahoma scored 36 out of a possible 40 points, less than the national average of 37.49 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 2.46 percent of The City National Bank and Trust Company of Lawton, Oklahoma'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 known as an "allowance for loan and lease losses" to deal with problem assets . 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 at-risk loans. Unfortunately, the FDIC did not provide information on The City National Bank and Trust Company of Lawton, Oklahoma's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank better able to withstand financial shocks. However, banks that are losing money have less ability to do those things.

On Bankrate's earnings test, The City National Bank and Trust Company of Lawton, Oklahoma scored 24 out of a possible 30, beating out the national average of 15.12.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for The City National Bank and Trust Company of Lawton, Oklahoma was 15.41 percent, above the national average of 8.10 percent.

The bank recorded net income of $6.5 million on total equity of $43.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.82 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.