Safe and Sound

Hinsdale Bank & Trust Company

Hinsdale, IL
4
Star Rating
Hinsdale Bank & Trust Company is a Hinsdale, IL-based, FDIC-insured bank that opened its doors in 1993. Regulatory filings show the bank having equity of $281.3 million on $2,145,130,000 in assets, as of June 30, 2017.

With 192 full-time employees in 13 offices in IL, the bank holds loans and leases worth $1.67 billion, including real estate loans of $703.0 million. U.S. bank customers currently have $1.80 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Hinsdale Bank & Trust Company exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three major criteria Bankrate used to grade U.S. banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for depositors when a bank is experiencing financial instability. It follows then that a bank's level of capital is a crucial measurement of a bank's financial fortitude. When looking at safety and soundness, more capital is preferred.
Hinsdale Bank & Trust Company scored below the national average of 13.38 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Hinsdale Bank & Trust Company's Tier 1 capital ratio was 10.75 percent, exceeding the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, Hinsdale Bank & Trust Company held equity amounting to 13.12 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid mortgages.

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

Hinsdale Bank & Trust Company beat out the national average of 37.62 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of June 30, 2017, 0.53 percent of Hinsdale Bank & Trust Company's loans were noncurrent -- in other words, 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 to handle troubled assets known as an "allowance for loan and lease losses." That reserve's size can be a handy 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 Hinsdale Bank & Trust Company's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, are less able to do those things.

Hinsdale Bank & Trust Company scored 18 out of a possible 30 on Bankrate's earnings test, beating the national average of 16.52.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Hinsdale Bank & Trust Company's most recent annualized quarterly return on equity was 9.22 percent, below the national average of 9.28 percent.

The bank recorded net income of $12.9 million on total equity of $281.3 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.23 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.