Safe and Sound

Emigrant Bank

New York, NY
4
Star Rating
Emigrant Bank is a New York, NY-based, FDIC-insured bank started in 1850. Regulatory filings show the bank having equity of $1.17 billion on assets of $6.41 billion, as of June 30, 2017.

U.S. bank customers have $4.30 billion on deposit at 5 offices in NY run by 590 full-time employees. With that footprint, the bank has amassed loans and leases worth $4.31 billion, including $2.38 billion worth of real estate loans.

Overall, Bankrate believes that, as of June 30, 2017, Emigrant Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to grade American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for depositors when a bank is experiencing economic trouble. It follows then that when it comes to measuring an a bank's financial strength, capital is key. When looking at safety and soundness, the higher the capital, the better.
Emigrant Bank did better than the national average of 13.38 points on our test to measure the adequacy of a bank's capital, receiving a score of 24 out of a possible 30 points.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Emigrant Bank's Tier 1 capital ratio was 19.28 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to economic difficulties.

Overall, Emigrant Bank held equity amounting to 17.61 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due loans.

A bank with a large number of these kinds of assets could eventually have to use capital to cover losses, reducing 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, decreasing earnings and increasing the risk of a future failure.

Emigrant Bank finished below the national average of 37.62 on Bankrate's asset quality test, racking up 28 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 4.82 percent of Emigrant Bank's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the how large that reserve is to the total amount of problem 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 Emigrant Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.

On Bankrate's test of earnings, Emigrant Bank scored 8 out of a possible 30, failing to reach the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. Emigrant Bank's most recent annualized quarterly return on equity was 3.99 percent, below the national average of 9.28 percent.

The bank reported net income of $22.2 million on total equity of $1.17 billion for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.70 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.