Safe and Sound

Harbor Community Bank

Fort Pierce, FL
3
Star Rating
Harbor Community Bank is a Fort Pierce, FL-based, FDIC-insured bank dating back to 1960. Regulatory filings show the bank having equity of $240.7 million on assets of $2.18 billion, as of December 31, 2017.

Thanks to the work of 478 full-time employees in 48 offices in FL, the bank holds loans and leases worth $1.35 billion, including $1.20 billion worth of real estate loans. U.S. bank customers currently have $1.77 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Harbor Community Bank exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank fared on the three major criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is essential. It acts as a buffer against losses and affords protection for accountholders when a bank is experiencing economic instability. From a safety and soundness perspective, the more capital, the better.

Harbor Community Bank received a score of 10 out of a possible 30 points on our test to measure capital adequacy, lower than the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Harbor Community Bank's Tier 1 capital ratio was 13.96 percent, exceeding the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial downturns.

Overall, Harbor Community Bank held equity amounting to 11.04 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 loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

A bank with extensive holdings of these types of assets may eventually have to use capital to absorb losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in depressed earnings and potentially more risk of a future failure.

Harbor Community Bank scored 32 out of a possible 40 points on Bankrate's test of asset quality, falling short of 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, 2.10 percent of Harbor Community Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . 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 Harbor Community Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.

Harbor Community Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Harbor Community Bank was 3.12 percent, below the national average of 8.10 percent.

The bank reported net income of $7.0 million on total equity of $240.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.35 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.