Safe and Sound

Ohana Pacific Bank

Honolulu, HI
4
Star Rating
Ohana Pacific Bank is an Honolulu, HI-based, FDIC-insured bank dating back to 2006. The bank holds equity of $16.7 million on $136,620,000 in assets, according to June 30, 2017, regulatory filings.

With 22 full-time employees in 2 offices in HI, the bank has amassed loans and leases worth $108.6 million, including real estate loans of $101.9 million. U.S. bank customers currently have $119.7 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Ohana Pacific Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank faired on the three key criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial resilience, capital is crucial. It works as a bulwark against losses and provides protection for depositors during periods of financial instability for the bank. When it comes to safety and soundness, the higher the capital, the better.
Ohana Pacific Bank achieved a score of 16 out of a possible 30 points on our test to measure the adequacy of a bank's capital, beating the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Ohana Pacific Bank's Tier 1 capital ratio was 16.39 percent, above the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather economic challenges.

Overall, Ohana Pacific Bank held equity amounting to 12.19 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

Having a large number of these types of assets means a bank may have to use capital to cover losses, reducing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, Ohana Pacific Bank scored 40 out of a possible 40 points, beating the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of June 30, 2017, none of Ohana Pacific Bank'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 maintain a reserve to deal with troubled 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 problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Ohana Pacific Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.

On Bankrate's test of earnings, Ohana Pacific Bank scored 10 out of a possible 30, falling short of the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Ohana Pacific Bank was 4.27 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $353,000 on total equity of $16.7 million. The bank had an annualized return on average assets, or ROA, of 0.52 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.