Safe and Sound

Premier Valley Bank

Fresno, CA
4
Star Rating
Founded in 2001, Premier Valley Bank is an FDIC-insured bank based in Fresno, CA. Regulatory filings show the bank having equity of $138.4 million on $925.1 million in assets, as of December 31, 2017.

U.S. bank customers have $705.1 million on deposit at 9 offices in CA run by 90 full-time employees. With that footprint, the bank holds loans and leases worth $511.3 million, $350.6 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, Premier Valley Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three key criteria Bankrate used to score American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial resilience, capital is essential. It acts as a bulwark against losses and as 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, Premier Valley Bank received a score of 8 out of a possible 30 points, lower than the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Premier Valley Bank's Tier 1 capital ratio was 12.56 percent, exceeding the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather economic difficulties.

Overall, Premier Valley Bank held equity amounting to 14.96 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 reserves set aside to cover loan losses, as well as overall capitalization, could be affected by problem assets, such as past-due loans.

A bank with lots of these types of assets could eventually be required to use capital to absorb losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, reducing earnings and increasing the risk of a failure in the future.

Premier Valley Bank scored above the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

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, 0.32 percent of Premier Valley 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 keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." Comparing how large that reserve is to the total amount of at-risk loans can be a useful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Premier Valley Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.

Premier Valley Bank scored 12 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. Premier Valley Bank's most recent annualized quarterly return on equity was 6.34 percent, below the national average of 8.10 percent.

The bank recorded net income of $8.3 million on total equity of $138.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.00 percent, right at the level deemed satisfactory in accordance with industry standards, and equal to 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.