Safe and Sound

Community Bank of Bergen County, N. J.

Maywood, NJ
2
Star Rating
Community Bank of Bergen County, N. J. is an FDIC-insured bank founded in 1928 and currently headquartered in Maywood, NJ. As of December 31, 2017, the bank held equity of $29.6 million on assets of $346.5 million.

With 63 full-time employees in 3 offices in NJ, the bank holds loans and leases worth $238.3 million, including real estate loans of $236.3 million. U.S. bank customers currently have $303.3 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Community Bank of Bergen County, N. J. exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three key criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial stability, capital is crucial. It works as a bulwark against losses and affords protection for depositors when a bank is experiencing economic instability. When it comes to safety and soundness, the more capital, the better.

Community Bank of Bergen County, N. J. fell below the national average of 13.13 on our test to measure the adequacy of a bank's capital, receiving a score of 8 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Community Bank of Bergen County, N. J.'s Tier 1 capital ratio was 14.36 percent, exceeding the 6 percent level considered adequate by regulators, but below the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather economic headwinds.

Overall, Community Bank of Bergen County, N. J. held equity amounting to 8.54 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

A bank with extensive holdings of these kinds of assets may eventually have to use capital to absorb losses, diminishing 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 money, reducing earnings and elevating the chances of a future failure.

On Bankrate's asset quality test, Community Bank of Bergen County, N. J. scored 32 out of a possible 40 points, lower than the national average of 37.49 points.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.70 percent of Community Bank of Bergen County, N. J.'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . How large that reserve is can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Community Bank of Bergen County, N. J.'s loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand financial shocks. Obviously, banks that are losing money have less ability to do those things.

Community Bank of Bergen County, N. J. scored 4 out of a possible 30 on Bankrate's earnings test, below the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. Community Bank of Bergen County, N. J.'s most recent annualized quarterly return on equity was 1.91 percent, below the national average of 8.10 percent.

The bank recorded net income of $566,000 on total equity of $29.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.16 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.