Safe and Sound

Pioneer Bank, SSB

Austin, TX
4
Star Rating
Austin, TX-based Pioneer Bank, SSB is an FDIC-insured bank started in 2007. As of June 30, 2017, the bank had equity of $140.1 million on assets of $1.14 billion.

Thanks to the efforts of 231 full-time employees in 22 offices in TX, the bank has amassed loans and leases worth $834.8 million, including $727.3 million worth of real estate loans. U.S. bank customers currently have $996.0 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Pioneer Bank, SSB exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank faired on the three major criteria Bankrate used to score U.S. banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for depositors when a bank is experiencing economic trouble. It follows then that a bank's level of capital is a valuable measurement of a bank's financial resilience. From a safety and soundness perspective, the more capital, the better.
Pioneer Bank, SSB beat out the national average of 13.38 points on our test to measure the adequacy of a bank's capital, receiving a score of 14 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Pioneer Bank, SSB's Tier 1 capital ratio was 10.98 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather financial difficulties.

Overall, Pioneer Bank, SSB held equity amounting to 12.27 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

A bank with lots of these kinds of assets could eventually be required 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, resulting in diminished earnings and potentially more risk of a failure in the future.

Pioneer Bank, SSB scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 0.80 percent of Pioneer Bank, SSB's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . That reserve's size 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 Pioneer Bank, SSB's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. Earnings can be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand financial trouble. Conversely, losses lessen a bank's ability to do those things.

On Bankrate's earnings test, Pioneer Bank, SSB scored 12 out of a possible 30, below the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Pioneer Bank, SSB's most recent annualized quarterly return on equity was 5.33 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $3.7 million on total equity of $140.1 million. The bank experienced an annualized return on average assets, or ROA, of 0.63 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.