Safe and Sound

Presidio Bank

San Francisco, CA
4
Star Rating
Presidio Bank is an FDIC-insured bank started in 2006 and currently headquartered in San Francisco, CA. Regulatory filings show the bank having equity of $71.3 million on $746,226,000 in assets, as of June 30, 2017.

U.S. bank customers have $659.9 million on deposit at 6 offices in CA run by 60 full-time employees. With that footprint, the bank holds loans and leases worth $596.7 million, $440.6 million of which are for real estate.

Overall, Bankrate believes that, as of June 30, 2017, Presidio 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 evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for depositors when a bank is experiencing financial instability. It follows then that a bank's level of capital is a useful measurement of an institution's financial resilience. When it comes to safety and soundness, the more capital, the better.
Presidio Bank received a score of 10 out of a possible 30 points on our test to measure capital adequacy, below the national average of 13.38.

One important measure of this buffer is a bank's Tier 1 capital ratio. Presidio Bank's Tier 1 capital ratio was 9.63 percent, exceeding the 6 percent level regulators consider adequate, but under the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to economic downturns.

Overall, Presidio Bank held equity amounting to 9.56 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

A bank with a large number of these kinds of assets could eventually have to use capital to absorb losses, cutting down on its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, resulting in diminished earnings and potentially more risk of a failure in the future.

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

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, 0.16 percent of Presidio 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 1.04 percent.

Banks keep a reserve to handle problem assets known as an "allowance for loan and lease losses." That reserve's size can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Presidio Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.

Presidio Bank scored 16 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 16.52.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for Presidio Bank was 8.06 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $2.8 million on total equity of $71.3 million. The bank experienced an annualized return on average assets, or ROA, of 0.77 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.