Safe and Sound

The Pitney Bowes Bank, Inc.

Salt Lake City, UT
5
Star Rating
The Pitney Bowes Bank, Inc. is an FDIC-insured bank founded in 1998 and currently headquartered in Salt Lake City, UT. The bank holds equity of $73.0 million on assets of $746.6 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 17 full-time employees, the bank currently holds loans and leases worth $270.1 million, including real estate loans of $2.3 million. The bank currently holds $589.5 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, The Pitney Bowes Bank, Inc. exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three key criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for account holders when a bank is struggling financially. Therefore, when it comes to measuring an an institution's financial fortitude, capital is key. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a bank's capital, The Pitney Bowes Bank, Inc. received a score of 10 out of a possible 30 points, falling short of the national average of 13.13.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. The Pitney Bowes Bank, Inc.'s Tier 1 capital ratio was 18.06 percent, above the 6 percent level considered adequate by regulators, but below the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic downturns.

Overall, The Pitney Bowes Bank, Inc. held equity amounting to 9.78 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 impact of troubled assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets suggests a bank may eventually have to use capital to cover losses, shrinking 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, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, The Pitney Bowes Bank, Inc. scored 40 out of a possible 40 points, above the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 1.54 percent of The Pitney Bowes Bank, Inc.'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 . How large that reserve is can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on The Pitney Bowes Bank, Inc.'s loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Obviously, banks that are losing money have less ability to do those things.

On Bankrate's test of earnings, The Pitney Bowes Bank, Inc. scored 30 out of a possible 30, above the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) 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 The Pitney Bowes Bank, Inc. was 86.54 percent, above the national average of 8.10 percent.

The bank reported net income of $63.0 million on total equity of $73.0 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 8.79 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.