CFS Bank in Charleroi remains on ‘problematic’ Pa. bank list
CFS Bank in Charleroi continues to show up on an independent research firm’s “problematic” list, but the bank’s new CEO says the troubled institution is profitable, and its financial condition continues to improve.
CFS Bank — which changed its name from Charleroi Federal Savings Bank in 2015 — received a twostar rating out of five from Bauer Financial in its latest rankings, based on data from the first quarter. It was the sixth quarter in a row that the bank received the low rating.
Only two other banks in Pennsylvania were rated that low, or lower, in the latest period: Noah Bank, in Elkins Park near Philadelphia (two stars), and United Bank of Philadelphia (zero stars).
CFS Bank — which has 10 offices in the Pittsburgh area, including at Southpointe and in Peters — has been operating under a formal agreement with the Office of the Comptroller of the Currency since March 2019 after a routine examination found “unsafe or unsound practices.”
The bank, founded in 1935, was ordered to make numerous operational changes, including revising policies and procedures regarding impaired loan identification and allowance for loan losses, as well as adopting a revised overdraft policy.
“The bank needed to make changes to improve. We are making those changes and we are seeing improvements,” CEO John C. Gill said Friday. Mr. Gill was hired as chief executive in April to replace Neil Bassi, who retired in January.
He noted the bank had made a number of changes to senior management and that over the last year, nonperforming loans had dropped from $6.9 million to $3.4 million.
“Our capital ratio is 16%, which is well in excess of the regulatory requirements,” Mr. Gill said.
“We are continuing to become much stronger financially. We are committed to our community and markets and to staying an independent bank.”
CFS Bank has a less than 1% share of deposits in the seven-county Pittsburgh region, according to Federal Deposit Insurance Corp. data.
Bauer Financial said the action by regulators was hurting CFS Bank’s star rating.
The research firm, based in Coral Gables, Fla., has said that banks that make its problem list aren’t necessarily at risk of failing. But customers may want to be sure their deposits don’t exceed federal insurance limits.