Safe and Sound

The Adirondack Trust Company

Saratoga Springs, NY
4
Star Rating
The Adirondack Trust Company is an FDIC-insured bank founded in 1901 and currently headquartered in Saratoga Springs, NY. Regulatory filings show the bank having equity of $113.3 million on $1,128,176,000 in assets, as of June 30, 2017.

Thanks to the work of 247 full-time employees in 13 offices in NY, the bank currently holds loans and leases worth $725.5 million, including $540.9 million worth of real estate loans. The bank currently holds $980.1 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, The Adirondack Trust Company exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to score U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a bank's financial strength. It acts as a bulwark against losses and affords protection for depositors when a bank is struggling financially. When it comes to safety and soundness, more capital is preferred.
The Adirondack Trust Company scored below the national average of 13.38 on our test to measure the adequacy of a bank's capital, scoring 8 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. The Adirondack Trust Company's Tier 1 capital ratio was 12.73 percent, exceeding the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial headwinds.

Overall, The Adirondack Trust Company held equity amounting to 10.03 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

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

A bank with a large number of these types of assets could eventually have to use capital to absorb losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, decreasing earnings and increasing the risk of a failure in the future.

The Adirondack Trust Company scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 0.52 percent of The Adirondack 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 deal with problem assets known as an "allowance for loan and lease losses." How large that reserve is can be a widely used indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on The Adirondack Trust Company's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, likely making the bank better prepared to withstand economic trouble. Obviously, banks that are losing money are less able to do those things.

The Adirondack Trust Company did below-average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The Adirondack Trust Company's most recent annualized quarterly return on equity was 7.41 percent, below the national average of 9.28 percent.

The bank recorded net income of $4.2 million on total equity of $113.3 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.73 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.