Safe and Sound

The Corn City State Bank

Deshler, OH
5
Star Rating
The Corn City State Bank is an FDIC-insured bank founded in 1911 and currently based in Deshler, OH. As of December 31, 2017, the bank had equity of $9.7 million on assets of $67.9 million.

Thanks to the efforts of 8 full-time employees, the bank holds loans and leases worth $31.8 million, $28.3 million of which are for real estate. The bank currently holds $51.1 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, The Corn City State Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three key criteria Bankrate used to evaluate U.S. banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial strength. It works as a bulwark against losses and as protection for depositors during times of financial trouble for the bank. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a bank's capital, The Corn City State Bank racked up 20 out of a possible 30 points, exceeding the national average of 13.13.

One important measure of this buffer is a bank's Tier 1 capital ratio. The Corn City State Bank's Tier 1 capital ratio was 34.13 percent, higher than the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial difficulties.

Overall, The Corn City State Bank held equity amounting to 14.27 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by problem assets, such as unpaid mortgages.

A bank with extensive holdings of these types of assets could eventually be forced to use capital to cover losses, decreasing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a future failure.

The Corn City State Bank scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 37.49.

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, 0.06 percent of The Corn City State Bank's loans were noncurrent, meaning 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 known as an "allowance for loan and lease losses" to deal with troubled assets . How large that reserve is 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 Corn City State Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Conversely, losses diminish a bank's ability to do those things.

The Corn City State Bank scored 18 out of a possible 30 on Bankrate's earnings test, beating the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for The Corn City State Bank was 8.11 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $799,000 on total equity of $9.7 million. The bank experienced an annualized return on average assets, or ROA, of 1.17 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.