Safe and Sound

Brentwood Bank

Bethel Park, PA
4
Star Rating
Brentwood Bank is an FDIC-insured bank founded in 1922 and currently headquartered in Bethel Park, PA. As of December 31, 2017, the bank held equity of $65.4 million on assets of $609.1 million.

U.S. bank customers have $473.4 million on deposit at 11 offices in PA run by 74 full-time employees. With that footprint, the bank holds loans and leases worth $471.7 million, $443.0 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, Brentwood Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for account holders during times of financial trouble for the bank. Therefore, a bank's level of capital is an important measurement of a bank's financial fortitude. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, Brentwood Bank received a score of 12 out of a possible 30 points, failing to reach the national average of 13.13.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Brentwood Bank's Tier 1 capital ratio was 13.21 percent, above the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, Brentwood Bank held equity amounting to 10.73 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due loans.

Having extensive holdings of these types of assets could eventually require a bank to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, Brentwood Bank scored 32 out of a possible 40 points, below the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 0.14 percent of Brentwood Bank'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 1.01 percent.

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

Earnings score

A bank's profitability affects its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Conversely, losses diminish a bank's ability to do those things.

Brentwood Bank scored 12 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 15.12.

One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for Brentwood Bank was 6.04 percent, below the national average of 8.10 percent.

The bank reported net income of $3.8 million on total equity of $65.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.64 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.