Safe and Sound

Sawyer Savings Bank

Saugerties, NY
4
Star Rating
Sawyer Savings Bank is an FDIC-insured bank started in 1871 and currently based in Saugerties, NY. Regulatory filings show the bank having equity of $25.1 million on $248.7 million in assets, as of December 31, 2017.

U.S. bank customers have $192.9 million on deposit at 3 offices in NY run by 44 full-time employees. With that footprint, the bank currently holds loans and leases worth $160.0 million, including $137.8 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, Sawyer Savings Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three major criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial strength. It acts as a buffer against losses and affords protection for depositors when a bank is experiencing economic trouble. From a safety and soundness perspective, more capital is preferred.

Sawyer Savings Bank fell below the national average of 13.13 on our test to measure capital adequacy, achieving a score of 12 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Sawyer Savings Bank's Tier 1 capital ratio was 21.52 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather financial difficulties.

Overall, Sawyer Savings Bank held equity amounting to 10.09 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

A bank with a large number of these kinds of assets could eventually have to use capital to absorb losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

Sawyer Savings Bank scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 37.49.

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, 0.47 percent of Sawyer Savings Bank'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 to handle troubled assets known as an "allowance for loan and lease losses." The size of that reserve can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Sawyer Savings 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, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.

Sawyer Savings Bank scored 4 out of a possible 30 on Bankrate's test of earnings, less than the national average of 15.12.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. Sawyer Savings Bank's most recent annualized quarterly return on equity was 1.74 percent, below the national average of 8.10 percent.

The bank reported net income of $435,000 on total equity of $25.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.18 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.