Safe and Sound

The First Central National Bank of St. Paris

St. Paris, OH
5
Star Rating
The First Central National Bank of St. Paris is a St. Paris, OH-based, FDIC-insured bank started in 1880. As of December 31, 2017, the bank held equity of $15.3 million on $95.1 million in assets.

U.S. bank customers have $78.4 million on deposit at 3 offices in OH run by 18 full-time employees. With that footprint, the bank currently holds loans and leases worth $49.4 million, $38.5 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, The First Central National Bank of St. Paris 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 grade U.S. 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 stability, capital is valuable. It works as a cushion against losses and affords protection for depositors when a bank is experiencing economic instability. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, The First Central National Bank of St. Paris achieved a score of 24 out of a possible 30 points, above the national average of 13.13.

A bank's Tier 1 capital ratio is an important measure of this buffer. The First Central National Bank of St. Paris's Tier 1 capital ratio was 25.98 percent, exceeding the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic difficulties.

Overall, The First Central National Bank of St. Paris held equity amounting to 16.13 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate 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 loans.

Having large numbers of these types of assets could eventually require a bank to use capital to cover losses, decreasing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and increasing the risk of a failure in the future.

On Bankrate's asset quality test, The First Central National Bank of St. Paris scored 40 out of a possible 40 points, beating the national average of 37.49 points.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.27 percent of The First Central National Bank of St. Paris'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 maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." 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 First Central National Bank of St. Paris's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

The First Central National Bank of St. Paris scored 8 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The First Central National Bank of St. Paris's most recent annualized quarterly return on equity was 3.94 percent, below the national average of 8.10 percent.

The bank recorded net income of $606,000 on total equity of $15.3 million for the twelve months ended December 31, 2017. The bank experienced 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.