Safe and Sound

Gibraltar Bank

Oak Ridge, NJ
4
Star Rating
Started in 1909, Gibraltar Bank is an FDIC-insured bank based in Oak Ridge, NJ. Regulatory filings show the bank having equity of $12.7 million on $106,518,000 in assets, as of June 30, 2017.

Thanks to the work of 22 full-time employees in 3 offices in NJ, the bank currently holds loans and leases worth $85.0 million, including real estate loans of $85.8 million. U.S. bank customers currently have $81.7 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Gibraltar Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three major criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for accountholders during periods of financial instability for the bank. Therefore, when it comes to measuring an an institution's financial resilience, capital is essential. When it comes to safety and soundness, more capital is preferred.
Gibraltar Bank racked up 14 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Gibraltar Bank's Tier 1 capital ratio was 18.32 percent, higher than the 6 percent level considered adequate by regulators, 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 downturns.

Overall, Gibraltar Bank held equity amounting to 11.95 percent of its assets, which was lower than the national average of 12.10 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.

A bank with a large number of these types of assets could eventually be required to use capital to absorb losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

Gibraltar Bank scored above the national average of 37.62 on Bankrate's asset quality test, racking up 40 out of a possible 40 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, 0.53 percent of Gibraltar 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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the the size of that reserve to the total amount of at-risk loans can be a useful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Gibraltar Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.

Gibraltar Bank scored 2 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 16.52.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Gibraltar Bank's most recent annualized quarterly return on equity was 0.74 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $47,000 on total equity of $12.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.09 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.