Safe and Sound

Amboy Bank

Old Bridge, NJ
5
Star Rating
Old Bridge, NJ-based Amboy Bank is an FDIC-insured bank founded in 1888. As of June 30, 2017, the bank held equity of $328.8 million on assets of $2.44 billion.

With 260 full-time employees in 23 offices in NJ, the bank currently holds loans and leases worth $1.86 billion, including real estate loans of $1.82 billion. U.S. bank customers currently have $1.87 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Amboy Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the bank did on the three major 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 bulwark against losses and as protection for accountholders when a bank is experiencing economic trouble. Therefore, a bank's level of capital is a valuable measurement of an institution's financial fortitude. When looking at safety and soundness, more capital is preferred.
Amboy Bank scored 18 out of a possible 30 points on our test to measure the adequacy of a bank's capital, beating the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Amboy Bank's Tier 1 capital ratio was 12.89 percent, above the 6 percent level regulators consider adequate, but under the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to financial downturns.

Overall, Amboy Bank held equity amounting to 13.45 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due loans.

A bank with large numbers of these kinds of assets could eventually be required to use capital to cover losses, decreasing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, Amboy Bank scored 36 out of a possible 40 points, less than the national average of 37.62 points.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.42 percent of Amboy Bank'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 1.04 percent.

Banks maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." That reserve's size can be a useful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Amboy Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.

Amboy Bank scored 22 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Amboy Bank's most recent annualized quarterly return on equity was 13.91 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $22.5 million on total equity of $328.8 million. The bank reported an annualized return on average assets, or ROA, of 1.84 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 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.