Safe and Sound

Glens Falls National Bank and Trust Company

Glens Falls, NY
4
Star Rating
Glens Falls National Bank and Trust Company is a Glens Falls, NY-based, FDIC-insured bank dating back to 1851. As of December 31, 2017, the bank had equity of $215.2 million on assets of $2.27 billion.

U.S. bank customers have $1.84 billion on deposit at 30 offices in NY run by 477 full-time employees. With that footprint, the bank currently holds loans and leases worth $1.55 billion, $947.8 million of which are for real estate.

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

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial fortitude. It works as a bulwark against losses and as protection for accountholders when a bank is experiencing economic instability. From a safety and soundness perspective, more capital is preferred.

On our test to measure capital adequacy, Glens Falls National Bank and Trust Company received a score of 8 out of a possible 30 points, failing to reach the national average of 13.13.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Glens Falls National Bank and Trust Company's Tier 1 capital ratio was 13.62 percent, above the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial difficulties.

Overall, Glens Falls National Bank and Trust Company held equity amounting to 9.46 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as unpaid loans.

Having large numbers of these types of assets could eventually require a bank to use capital to cover losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, resulting in reduced earnings and potentially more risk of a future failure.

Glens Falls National Bank and Trust Company beat out the national average of 37.49 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.31 percent of Glens Falls National Bank and Trust Company's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Glens Falls National Bank and Trust Company's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand financial shocks. Conversely, losses take away from a bank's ability to do those things.

Glens Falls National Bank and Trust Company scored 20 out of a possible 30 on Bankrate's test of earnings, beating the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Glens Falls National Bank and Trust Company's most recent annualized quarterly return on equity was 12.00 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $25.0 million on total equity of $215.2 million. The bank experienced an annualized return on average assets, or ROA, of 1.12 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.