Safe and Sound

Slovenian Savings and Loan Association of Canonsburg

Strabane, PA
5
Star Rating
Slovenian Savings and Loan Association of Canonsburg is an FDIC-insured bank started in 1925 and currently headquartered in Strabane, PA. The bank holds equity of $53.4 million on assets of $376.5 million, according to June 30, 2017, regulatory filings.

Thanks to the work of 18 full-time employees, the bank holds loans and leases worth $162.6 million, including $163.1 million worth of real estate loans. U.S. bank customers currently have $322.6 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Slovenian Savings and Loan Association of Canonsburg exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank faired on the three major criteria Bankrate used to evaluate U.S. banks on safety and soundness.

WHAT IS
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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for depositors during periods of financial instability for the bank. It follows then that a bank's level of capital is a crucial measurement of an institution's financial fortitude. From a safety and soundness perspective, the higher the capital, the better.
Slovenian Savings and Loan Association of Canonsburg did better than the national average of 13.38 points on our test to measure capital adequacy, achieving a score of 20 out of a possible 30 points.

A bank's Tier 1 capital ratio is an important measure of this buffer. Slovenian Savings and Loan Association of Canonsburg's Tier 1 capital ratio was 23.66 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather financial challenges.

Overall, Slovenian Savings and Loan Association of Canonsburg held equity amounting to 14.18 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 troubled assets, such as past-due loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these kinds of assets means a bank could have to use capital to absorb losses, diminishing its cushion of equity. 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, reducing earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, Slovenian Savings and Loan Association of Canonsburg scored 36 out of a possible 40 points, coming in below the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of June 30, 2017, 2.87 percent of Slovenian Savings and Loan Association of Canonsburg'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." 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 at-risk loans. Unfortunately, the FDIC did not provide information on Slovenian Savings and Loan Association of Canonsburg's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.

Slovenian Savings and Loan Association of Canonsburg scored 14 out of a possible 30 on Bankrate's test of earnings, below the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. Slovenian Savings and Loan Association of Canonsburg's most recent annualized quarterly return on equity was 6.69 percent, below the national average of 9.28 percent.

The bank earned net income of $1.8 million on total equity of $53.4 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.95 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.