Safe and Sound

Schuyler Savings Bank

Kearny, NJ
4
Star Rating
Started in 1924, Schuyler Savings Bank is an FDIC-insured bank based in Kearny, NJ. The bank has equity of $19.0 million on $116.7 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 17 full-time employees in 2 offices in NJ, the bank holds loans and leases worth $75.0 million, including real estate loans of $75.7 million. The bank currently holds $92.7 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Schuyler Savings Bank 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 key criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial fortitude, capital is essential. It works as a buffer against losses and affords protection for accountholders when a bank is experiencing financial instability. When looking at safety and soundness, the more capital, the better.

Schuyler Savings Bank racked up 24 out of a possible 30 points on our test to measure the adequacy of a bank's capital, above the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Schuyler Savings Bank's Tier 1 capital ratio was 35.75 percent, higher than the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather financial headwinds.

Overall, Schuyler Savings Bank held equity amounting to 16.26 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

Having extensive holdings of these types of assets means a bank could eventually have to use capital to absorb losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in lower earnings and potentially more risk of a failure in the future.

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

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.72 percent of Schuyler 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 keep a reserve to deal with problem assets known as an "allowance for loan and lease losses." That reserve's size can be a helpful 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 Schuyler Savings Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial trouble. Banks that are losing money, however, are less able to do those things.

On Bankrate's earnings test, Schuyler Savings Bank scored 2 out of a possible 30, coming in below the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. Schuyler Savings Bank's most recent annualized quarterly return on equity was 0.01 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $2,000 on total equity of $19.0 million. The bank had an annualized return on average assets, or ROA, of 0.00 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.