Safe and Sound

FNB Bank, National Association

Danville, PA
4
Star Rating
FNB Bank, National Association is a Danville, PA-based, FDIC-insured bank founded in 1864. Regulatory filings show the bank having equity of $42.1 million on assets of $353.6 million, as of December 31, 2017.

U.S. bank customers have $290.8 million on deposit at 6 offices in PA run by 41 full-time employees. With that footprint, the bank currently holds loans and leases worth $255.7 million, $200.4 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, FNB Bank, National Association 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 American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for depositors when a bank is experiencing financial trouble. Therefore, a bank's level of capital is a key measurement of a bank's financial strength. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, FNB Bank, National Association received a score of 12 out of a possible 30 points, lower than the national average of 13.13.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. FNB Bank, National Association's Tier 1 capital ratio was 17.06 percent, exceeding the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic difficulties.

Overall, FNB Bank, National Association held equity amounting to 11.91 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with a large number of these types of assets could eventually be forced to use capital to absorb losses, decreasing its buffer 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, diminishing earnings and increasing the risk of a failure in the future.

FNB Bank, National Association exceeded the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 0.79 percent of FNB Bank, National Association'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 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 problematic loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on FNB Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand economic trouble. Banks that are losing money, however, have less ability to do those things.

FNB Bank, National Association did above-average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.

One widely used way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. FNB Bank, National Association's most recent annualized quarterly return on equity was 7.83 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $3.2 million on total equity of $42.1 million. The bank reported an annualized return on average assets, or ROA, of 0.92 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.