Safe and Sound

Noah Bank

Elkins Park, PA
4
Star Rating
Noah Bank is an FDIC-insured bank started in 2006 and currently based in Elkins Park, PA. Regulatory filings show the bank having equity of $40.6 million on $340,937,000 in assets, as of June 30, 2017.

Thanks to the efforts of 69 full-time employees in 5 offices in multiple states, the bank has amassed loans and leases worth $284.4 million, including real estate loans of $230.0 million. The bank currently holds $287.4 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Noah Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three key criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for accountholders when a bank is experiencing financial instability. It follows then that a bank's level of capital is an essential measurement of an institution's financial fortitude. From a safety and soundness perspective, more capital is better.
Noah Bank fell below the national average of 13.38 on our test to measure the adequacy of a bank's capital, receiving a score of 12 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Noah Bank's Tier 1 capital ratio was 12.95 percent, higher than the 6 percent level considered adequate by regulators, but lower than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to economic challenges.

Overall, Noah Bank held equity amounting to 11.90 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended 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 loans.

Having a large number of these types of assets suggests a bank could eventually have to use capital to absorb losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, Noah Bank scored 32 out of a possible 40 points, failing to reach the national average of 37.62 points.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 2.26 percent of Noah Bank'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 1.04 percent.

Banks keep a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing the how large that reserve is to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Noah Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, lessen a bank's ability to do those things.

Noah Bank fell short of the national average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.

One key measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. The most recent annualized quarterly return on equity for Noah Bank was 6.70 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $1.3 million on total equity of $40.6 million. The bank had an annualized return on average assets, or ROA, of 0.79 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 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.