Safe and Sound

Pioneer Trust Bank, National Association

Salem, OR
5
Star Rating
Pioneer Trust Bank, National Association is an FDIC-insured bank founded in 1924 and currently headquartered in Salem, OR. Regulatory filings show the bank having equity of $57.8 million on $494.9 million in assets, as of December 31, 2017.

U.S. bank customers have $436.2 million on deposit at 2 offices in OR run by 67 full-time employees. With that footprint, the bank currently holds loans and leases worth $342.0 million, including $283.2 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, Pioneer Trust Bank, National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three major criteria Bankrate used to evaluate American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for depositors when a bank is experiencing economic trouble. Therefore, a bank's level of capital is a key measurement of a bank's financial strength. From a safety and soundness perspective, more capital is better.

Pioneer Trust Bank, National Association scored above the national average of 13.13 points on our test to measure capital adequacy, racking up 14 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Pioneer Trust Bank, National Association's Tier 1 capital ratio was 15.05 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic headwinds.

Overall, Pioneer Trust Bank, National Association held equity amounting to 11.68 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is 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 lots of these types of assets could eventually be required to use capital to cover losses, cutting down on its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and increasing the chances of a failure in the future.

Pioneer Trust Bank, National Association scored 40 out of a possible 40 points on Bankrate's asset quality test, better than the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, none of Pioneer Trust 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 maintain a reserve to handle troubled assets known as an "allowance for loan and lease losses." The size of that reserve can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Pioneer Trust Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses reduce a bank's ability to do those things.

On Bankrate's earnings test, Pioneer Trust Bank, National Association scored 28 out of a possible 30, better than the national average of 15.12.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Pioneer Trust Bank, National Association's most recent annualized quarterly return on equity was 19.38 percent, above the national average of 8.10 percent.

The bank earned net income of $10.6 million on total equity of $57.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 2.24 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.