Safe and Sound

Standard Bank, PaSB

Murrysville, PA
4
Star Rating
Standard Bank, PaSB is a Murrysville, PA-based, FDIC-insured bank dating back to 1921. The bank has equity of $127.8 million on $975,571,000 in assets, according to June 30, 2017, regulatory filings.

U.S. bank customers have $713.5 million on deposit at 19 offices in multiple states run by 166 full-time employees. With that footprint, the bank holds loans and leases worth $734.3 million, including real estate loans of $675.8 million.

Overall, Bankrate believes that, as of June 30, 2017, Standard Bank, PaSB exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three major 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 accountholders during periods of financial trouble for the bank. It follows then that when it comes to measuring an an institution's financial fortitude, capital is key. When looking at safety and soundness, more capital is better.
Standard Bank, PaSB came in below the national average of 13.38 on our test to measure capital adequacy, receiving a score of 12 out of a possible 30 points.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Standard Bank, PaSB's Tier 1 capital ratio was 15.18 percent, exceeding the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to economic difficulties.

Overall, Standard Bank, PaSB held equity amounting to 13.10 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with extensive holdings of these kinds of assets could eventually be required to use capital to absorb losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in reduced earnings and potentially more risk of a failure in the future.

Standard Bank, PaSB scored above the national average of 37.62 on Bankrate's test of asset quality, racking up 40 out of a possible 40 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, 0.59 percent of Standard Bank, PaSB'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 maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." Comparing the how large that reserve is to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Standard Bank, PaSB's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.

Standard Bank, PaSB scored 4 out of a possible 30 on Bankrate's earnings test, coming in 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. The most recent annualized quarterly return on equity for Standard Bank, PaSB was 2.61 percent, below the national average of 9.28 percent.

The bank earned net income of $1.2 million on total equity of $127.8 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.36 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.