Safe and Sound

Huntingdon Savings Bank

Huntingdon, PA
5
Star Rating
Huntingdon, PA-based Huntingdon Savings Bank is an FDIC-insured bank founded in 1923. As of December 31, 2017, the bank had equity of $3.3 million on $17.9 million in assets.

Thanks to the efforts of 2 full-time employees, the bank currently holds loans and leases worth $12.3 million, including $12.4 million worth of real estate loans. The bank currently holds $14.6 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Huntingdon Savings Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three key criteria Bankrate used to score American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for account holders when a bank is experiencing economic 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 higher the capital, the better.

Huntingdon Savings Bank scored above the national average of 13.13 points on our test to measure the adequacy of a bank's capital, scoring 28 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Huntingdon Savings Bank's Tier 1 capital ratio was 44.41 percent, above the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather financial downturns.

Overall, Huntingdon Savings Bank held equity amounting to 18.57 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

A bank with large numbers of these kinds of assets could eventually have to use capital to absorb losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in lower earnings and potentially more risk of a failure in the future.

Huntingdon Savings Bank scored 40 out of a possible 40 points on Bankrate's asset quality test, better than the national average of 37.49.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.54 percent of Huntingdon Savings Bank's loans were noncurrent, meaning 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 maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the reserve's size to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Huntingdon Savings Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

On Bankrate's earnings test, Huntingdon Savings Bank scored 8 out of a possible 30, less than the national average of 15.12.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Huntingdon Savings Bank's most recent annualized quarterly return on equity was 3.37 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $110,000 on total equity of $3.3 million. The bank reported an annualized return on average assets, or ROA, of 0.59 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.