Safe and Sound

Piscataqua Savings Bank

Portsmouth, NH
4
Star Rating
Started in 1877, Piscataqua Savings Bank is an FDIC-insured bank based in Portsmouth, NH. The bank holds equity of $41.0 million on assets of $264.0 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 40 full-time employees, the bank has amassed loans and leases worth $170.8 million, $170.2 million of which are for real estate. U.S. bank customers currently have $221.6 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Piscataqua Savings Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank fared on the three important criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial resilience, capital is useful. It acts as a buffer against losses and provides protection for accountholders when a bank is struggling financially. When it comes to safety and soundness, the more capital, the better.

On our test to measure the adequacy of a bank's capital, Piscataqua Savings Bank scored 22 out of a possible 30 points, beating the national average of 13.13.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Piscataqua Savings Bank's Tier 1 capital ratio was 27.93 percent, exceeding the 6 percent level considered adequate by regulators, and above the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather economic challenges.

Overall, Piscataqua Savings Bank held equity amounting to 15.51 percent of its assets, which exceeded 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 unpaid loans.

A bank with a large number of these types of assets may eventually be forced to use capital to cover losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, decreasing earnings and increasing the chances of a future failure.

Piscataqua Savings Bank did better than the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

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, 0.33 percent of Piscataqua Savings Bank'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the reserve's size to the total amount of problematic loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Piscataqua Savings Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand economic trouble. However, banks that are losing money are less able to do those things.

Piscataqua Savings Bank scored 4 out of a possible 30 on Bankrate's test of earnings, less than the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. Piscataqua Savings Bank's most recent annualized quarterly return on equity was 1.28 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $523,000 on total equity of $41.0 million. The bank had an annualized return on average assets, or ROA, of 0.20 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.