Safe and Sound

Bank of Napa, N.A.

Napa, CA
5
Star Rating
Started in 2006, Bank of Napa, N.A. is an FDIC-insured bank headquartered in Napa, CA. Regulatory filings show the bank having equity of $27.2 million on assets of $246.1 million, as of June 30, 2017.

With 28 full-time employees in 2 offices in CA, the bank has amassed loans and leases worth $137.4 million, including real estate loans of $115.2 million. U.S. bank customers currently have $217.7 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Bank of Napa, N.A. exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank did on the three key criteria Bankrate used to score American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for depositors during times of economic instability for the bank. Therefore, a bank's level of capital is a crucial measurement of an institution's financial strength. From a safety and soundness perspective, the more capital, the better.
Bank of Napa, N.A. did better than the national average of 13.38 points on our test to measure capital adequacy, achieving a score of 14 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Bank of Napa, N.A.'s Tier 1 capital ratio was 16.40 percent, exceeding the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather economic challenges.

Overall, Bank of Napa, N.A. held equity amounting to 11.04 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

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

Having lots of these types of assets may eventually require a bank to use capital to absorb losses, cutting down on its cushion 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.

On Bankrate's test of asset quality, Bank of Napa, N.A. scored 40 out of a possible 40 points, better than the national average of 37.62 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.10 percent of Bank of Napa, N.A.'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 1.04 percent.

Banks keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the that reserve's size to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Bank of Napa, N.A.'s loan loss allowance was 1,406.57 percent of its total noncurrent loans, above the national average. All else being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to address problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses lessen a bank's ability to do those things.

Bank of Napa, N.A. scored 16 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 16.52.

One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Bank of Napa, N.A.'s most recent annualized quarterly return on equity was 7.49 percent, below the national average of 9.28 percent.

The bank reported net income of $993,000 on total equity of $27.2 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.81 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 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.