Safe and Sound

The First National Bank of Peterstown

Peterstown, WV
4
Star Rating
The First National Bank of Peterstown is an FDIC-insured bank started in 1910 and currently headquartered in Peterstown, WV. Regulatory filings show the bank having equity of $7.5 million on $61.2 million in assets, as of December 31, 2017.

Thanks to the work of 15 full-time employees in 2 offices in multiple states, the bank has amassed loans and leases worth $38.5 million, including $34.1 million worth of real estate loans. The bank currently holds $53.6 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, The First National Bank of Peterstown 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 major criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for depositors during times of economic trouble for the bank. Therefore, when it comes to measuring an a bank's financial fortitude, capital is crucial. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, The First National Bank of Peterstown achieved a score of 16 out of a possible 30 points, above the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. The First National Bank of Peterstown's Tier 1 capital ratio was 22.10 percent, above 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 stand up to financial challenges.

Overall, The First National Bank of Peterstown held equity amounting to 12.27 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

A bank with lots of these kinds of assets could eventually be required to use capital to cover losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, decreasing earnings and elevating the chances of a future failure.

The First National Bank of Peterstown scored 36 out of a possible 40 points on Bankrate's asset quality test, falling short of 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, 1.56 percent of The First National Bank of Peterstown's loans were noncurrent -- in other words, 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 keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a useful 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 The First National Bank of Peterstown's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand financial trouble. Losses, on the other hand, lessen a bank's ability to do those things.

The First National Bank of Peterstown scored 8 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The First National Bank of Peterstown's most recent annualized quarterly return on equity was 3.08 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $231,000 on total equity of $7.5 million. The bank experienced an annualized return on average assets, or ROA, of 0.38 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.