Safe and Sound

Everence Trust Company

Goshen, IN
4
Star Rating
Founded in 2001, Everence Trust Company is an FDIC-insured bank based in Goshen, IN. The bank holds equity of $6.8 million on $8.0 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 19 full-time employees, the bank currently holds loans and leases worth $0, including $0 worth of real estate loans. U.S. bank customers currently have $500,000 in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Everence Trust Company exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three major criteria Bankrate used to grade U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for account holders during times of economic instability for the bank. Therefore, when it comes to measuring an a bank's financial fortitude, capital is important. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, Everence Trust Company achieved a score of 30 out of a possible 30 points, exceeding the national average of 13.13.

A bank's Tier 1 capital ratio is an important measure of this buffer. Everence Trust Company's Tier 1 capital ratio was 307.12 percent, above the 6 percent level regulators consider adequate, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial headwinds.

Overall, Everence Trust Company held equity amounting to 84.71 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

A bank with lots of these kinds of assets could eventually be forced to use capital to absorb losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, decreasing earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, Everence Trust Company scored 40 out of a possible 40 points, beating out the national average of 37.49 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets.

Banks keep a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of at-risk loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Everence Trust Company's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.

On Bankrate's test of earnings, Everence Trust Company scored 0 out of a possible 30, failing to reach the national average of 15.12.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Everence Trust Company's most recent annualized quarterly return on equity was -0.53 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $-35,000 on total equity of $6.8 million. The bank had an annualized return on average assets, or ROA, of -0.46 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.