Safe and Sound

Emigrant Bank

New York, NY
4
Star Rating
Founded in 1850, Emigrant Bank is an FDIC-insured bank headquartered in New York, NY. The bank holds equity of $1.25 billion on $6.17 billion in assets, according to December 31, 2017, regulatory filings.

U.S. bank customers have $4.64 billion on deposit at 5 offices in NY run by 586 full-time employees. With that footprint, the bank currently holds loans and leases worth $4.32 billion, including real estate loans of $2.41 billion.

Overall, Bankrate believes that, as of December 31, 2017, Emigrant Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three major criteria Bankrate used to score American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for account holders during periods of financial instability for the bank. Therefore, when it comes to measuring an a bank's financial fortitude, capital is key. From a safety and soundness perspective, more capital is preferred.

Emigrant Bank scored above the national average of 13.19 points on our test to measure the adequacy of a bank's capital, achieving a score of 28 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Emigrant Bank's Tier 1 capital ratio was 21.19 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.67 percent. The higher the capital ratio, the better the bank will be able to stand up to economic difficulties.

Overall, Emigrant Bank held equity amounting to 19.50 percent of its assets, which exceeded the national average of 12.04 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets may eventually require a bank to use capital to absorb losses, shrinking its buffer 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, decreasing earnings and increasing the risk of a failure in the future.

On Bankrate's asset quality test, Emigrant Bank scored 32 out of a possible 40 points, less than the national average of 37.70 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, 4.59 percent of Emigrant Bank'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 1.14 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the reserve's size to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Emigrant 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 may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. Conversely, losses reduce a bank's ability to do those things.

Emigrant Bank outperformed the average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Emigrant Bank was 8.48 percent, above the national average of 8.10 percent.

The bank recorded net income of $96.6 million on total equity of $1.25 billion for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.52 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.