Safe and Sound

Holladay Bank & Trust

Salt Lake City, UT
5
Star Rating
Founded in 1974, Holladay Bank & Trust is an FDIC-insured bank headquartered in Salt Lake City, UT. The bank holds equity of $8.3 million on $55.7 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 11 full-time employees, the bank holds loans and leases worth $39.8 million, including real estate loans of $34.5 million. U.S. bank customers currently have $46.7 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Holladay Bank & Trust exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important 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 bulwark against losses and provides protection for depositors during times of financial instability for the bank. Therefore, a bank's level of capital is a crucial measurement of a bank's financial resilience. When looking at safety and soundness, more capital is better.

Holladay Bank & Trust did better than the national average of 13.13 points on our test to measure the adequacy of a bank's capital, receiving a score of 20 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Holladay Bank & Trust's Tier 1 capital ratio was 20.54 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial downturns.

Overall, Holladay Bank & Trust held equity amounting to 14.98 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due loans.

A bank with a large number of these kinds of assets could eventually be required to use capital to cover losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, Holladay Bank & Trust scored 40 out of a possible 40 points, exceeding the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, none of Holladay Bank & Trust's loans were noncurrent -- in other words, 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 . That reserve's size can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Holladay Bank & Trust's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Banks that are losing money, however, are less able to do those things.

Holladay Bank & Trust exceeded the national 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 total equity, is one important way to measure a bank's earnings. Holladay Bank & Trust's most recent annualized quarterly return on equity was 8.32 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $670,000 on total equity of $8.3 million. The bank had an annualized return on average assets, or ROA, of 1.21 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.