Safe and Sound

Industrial and Commercial Bank of China USA, National Association

New York, NY
5
Star Rating
Industrial and Commercial Bank of China USA, National Association is an FDIC-insured bank founded in 1983 and currently headquartered in New York, NY. The bank has equity of $330.4 million on $2,138,904,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the work of 291 full-time employees in 13 offices in multiple states, the bank holds loans and leases worth $1.85 billion, including $1.44 billion worth of real estate loans. U.S. bank customers currently have $1.73 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Industrial and Commercial Bank of China USA, National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank faired on the three major criteria Bankrate used to score U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial fortitude. It works as a bulwark against losses and affords protection for depositors during times of economic trouble for the bank. When looking at safety and soundness, more capital is preferred.
Industrial and Commercial Bank of China USA, National Association achieved a score of 18 out of a possible 30 points on our test to measure capital adequacy, above the national average of 13.38.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Industrial and Commercial Bank of China USA, National Association's Tier 1 capital ratio was 14.64 percent, higher than the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to economic challenges.

Overall, Industrial and Commercial Bank of China USA, National Association held equity amounting to 15.45 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

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

A bank with lots of these types of assets could eventually be forced to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and increasing the risk of a future failure.

Industrial and Commercial Bank of China USA, National Association scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 37.62.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.01 percent of Industrial and Commercial Bank of China USA, National Association'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 1.04 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Industrial and Commercial Bank of China USA, National Association's loan loss allowance was 4,337.56 percent of its total noncurrent loans, exceeding the national average. All things being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank better prepared to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.

On Bankrate's test of earnings, Industrial and Commercial Bank of China USA, National Association scored 12 out of a possible 30, coming in below the national average of 16.52.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for Industrial and Commercial Bank of China USA, National Association was 5.58 percent, below the national average of 9.28 percent.

The bank reported net income of $9.1 million on total equity of $330.4 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.85 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.