Safe and Sound

Bank of Millbrook

Millbrook, NY
4
Star Rating
Bank of Millbrook is an FDIC-insured bank started in 1891 and currently based in Millbrook, NY. Regulatory filings show the bank having equity of $22.6 million on $229.1 million in assets, as of December 31, 2017.

Thanks to the efforts of 43 full-time employees in 4 offices in NY, the bank holds loans and leases worth $93.0 million, including real estate loans of $86.0 million. The bank currently holds $204.9 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Bank of Millbrook exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three major criteria Bankrate used to evaluate American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for account holders when a bank is experiencing economic trouble. It follows then that a bank's level of capital is a key measurement of a bank's financial strength. When looking at safety and soundness, the higher the capital, the better.

Bank of Millbrook fell below the national average of 13.13 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Bank of Millbrook's Tier 1 capital ratio was 21.77 percent, exceeding the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather economic headwinds.

Overall, Bank of Millbrook held equity amounting to 9.88 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these types of assets suggests a bank could have to use capital to cover losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

Bank of Millbrook scored 36 out of a possible 40 points on Bankrate's asset quality test, below the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 2.03 percent of Bank of Millbrook'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 1.01 percent.

Banks keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." The size of that reserve can be a helpful 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 Bank of Millbrook'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 may be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.

Bank of Millbrook fell behind the national average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Bank of Millbrook's most recent annualized quarterly return on equity was 6.53 percent, below the national average of 8.10 percent.

The bank reported net income of $1.5 million on total equity of $22.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.68 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.