Safe and Sound

PyraMax Bank, FSB

Greenfield, WI
4
Star Rating
Founded in 1892, PyraMax Bank, FSB is an FDIC-insured bank based in Greenfield, WI. As of December 31, 2017, the bank held equity of $39.0 million on $466.1 million in assets.

U.S. bank customers have $390.0 million on deposit at 9 offices in WI run by 111 full-time employees. With that footprint, the bank currently holds loans and leases worth $331.4 million, including $312.1 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, PyraMax Bank, FSB exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial strength, capital is valuable. It acts as a bulwark against losses and as protection for depositors when a bank is struggling financially. When it comes to safety and soundness, the more capital, the better.

PyraMax Bank, FSB came in below the national average of 13.13 on our test to measure capital adequacy, achieving a score of 6 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. PyraMax Bank, FSB's Tier 1 capital ratio was 11.02 percent, higher than the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic difficulties.

Overall, PyraMax Bank, FSB held equity amounting to 8.37 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

Having lots of these kinds of assets means a bank could eventually have to use capital to absorb losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in reduced earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, PyraMax Bank, FSB scored 40 out of a possible 40 points, exceeding the national average of 37.49 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, 0.56 percent of PyraMax Bank, FSB'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 to handle troubled assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of problem 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 PyraMax Bank, FSB's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.

PyraMax Bank, FSB scored 10 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 the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for PyraMax Bank, FSB was 4.09 percent, below the national average of 8.10 percent.

The bank reported net income of $1.7 million on total equity of $39.0 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.36 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.