Safe and Sound

The First Bank of Greenwich

Cos Cob, CT
4
Star Rating
The First Bank of Greenwich is a Cos Cob, CT-based, FDIC-insured bank started in 2006. The bank has equity of $29.8 million on $329.9 million in assets, according to December 31, 2017, regulatory filings.

With 38 full-time employees in 3 offices in CT, the bank has amassed loans and leases worth $295.6 million, including real estate loans of $275.8 million. U.S. bank customers currently have $245.0 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The First Bank of Greenwich exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three major criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial fortitude, capital is crucial. It works as a buffer against losses and as protection for accountholders when a bank is experiencing economic instability. When it comes to safety and soundness, the higher the capital, the better.

The First Bank of Greenwich fell below the national average of 13.13 on our test to measure the adequacy of a bank's capital, racking up 10 out of a possible 30 points.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. The First Bank of Greenwich's Tier 1 capital ratio was 11.35 percent, higher than the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, The First Bank of Greenwich held equity amounting to 9.04 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with large numbers of these types of assets could eventually be required to use capital to absorb losses, cutting down on 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 money, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, The First Bank of Greenwich scored 36 out of a possible 40 points, falling short of the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 0.72 percent of The First Bank of Greenwich'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 . Comparing how large that reserve is to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on The First Bank of Greenwich's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank better prepared to withstand economic shocks. Banks that are losing money, however, have less ability to do those things.

The First Bank of Greenwich scored 10 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for The First Bank of Greenwich was 4.70 percent, below the national average of 8.10 percent.

The bank reported net income of $1.3 million on total equity of $29.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.45 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.