Safe and Sound

Fidelity Savings and Loan Association of Bucks Co

Bristol, PA
4
Star Rating
Started in 1885, Fidelity Savings and Loan Association of Bucks Co is an FDIC-insured bank headquartered in Bristol, PA. The bank holds equity of $12.4 million on $87.8 million in assets, according to December 31, 2017, regulatory filings.

U.S. bank customers have $73.4 million on deposit at 2 offices in PA run by 13 full-time employees. With that footprint, the bank currently holds loans and leases worth $61.6 million, including real estate loans of $62.0 million.

Overall, Bankrate believes that, as of December 31, 2017, Fidelity Savings and Loan Association of Bucks Co exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three key criteria Bankrate used to evaluate U.S. banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is crucial. It acts as a buffer against losses and as protection for depositors during periods of financial instability for the bank. When it comes to safety and soundness, the more capital, the better.

Fidelity Savings and Loan Association of Bucks Co scored above the national average of 13.13 points on our test to measure the adequacy of a bank's capital, scoring 20 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Fidelity Savings and Loan Association of Bucks Co's Tier 1 capital ratio was 29.37 percent, higher than the 6 percent level regulators consider adequate, and above the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic headwinds.

Overall, Fidelity Savings and Loan Association of Bucks Co held equity amounting to 14.12 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

Having large numbers of these kinds of assets means a bank may eventually have to use capital to absorb losses, decreasing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and increasing the chances of a future failure.

Fidelity Savings and Loan Association of Bucks Co scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 37.49.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.76 percent of Fidelity Savings and Loan Association of Bucks Co'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 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing how large that reserve is to the total amount of problem loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Fidelity Savings and Loan Association of Bucks Co's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.

On Bankrate's test of earnings, Fidelity Savings and Loan Association of Bucks Co scored 2 out of a possible 30, lower than the national average of 15.12.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Fidelity Savings and Loan Association of Bucks Co was 0.87 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $107,000 on total equity of $12.4 million. The bank experienced an annualized return on average assets, or ROA, of 0.12 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.