Safe and Sound

The Peoples National Bank of Mount Pleasant

Mount Pleasant, OH
4
Star Rating
Started in 1903, The Peoples National Bank of Mount Pleasant is an FDIC-insured bank based in Mount Pleasant, OH. As of December 31, 2017, the bank had equity of $7.6 million on assets of $67.6 million.

Thanks to the efforts of 27 full-time employees in 3 offices in OH, the bank has amassed loans and leases worth $45.8 million, $28.3 million of which are for real estate. U.S. bank customers currently have $59.2 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Peoples National Bank of Mount Pleasant exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three key 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 resilience, capital is essential. It works as a bulwark against losses and provides protection for accountholders during times of financial instability for the bank. When looking at safety and soundness, more capital is preferred.

The Peoples National Bank of Mount Pleasant beat out the national average of 13.13 points on our test to measure capital adequacy, racking up 14 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. The Peoples National Bank of Mount Pleasant's Tier 1 capital ratio was 20.78 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial challenges.

Overall, The Peoples National Bank of Mount Pleasant held equity amounting to 11.21 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as past-due mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these kinds of assets could eventually force a bank to use capital to cover losses, shrinking its buffer of equity. 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, pushing down earnings and elevating the chances of a future failure.

The Peoples National Bank of Mount Pleasant exceeded the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.17 percent of The Peoples National Bank of Mount Pleasant'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 problem assets known as an "allowance for loan and lease losses." 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 The Peoples National Bank of Mount Pleasant's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, potentially making the bank better able to withstand economic shocks. Losses, on the other hand, take away from a bank's ability to do those things.

The Peoples National Bank of Mount Pleasant scored 10 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 15.12.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for The Peoples National Bank of Mount Pleasant was 4.63 percent, below the national average of 8.10 percent.

The bank reported net income of $346,000 on total equity of $7.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.54 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.