Safe and Sound

Safra National Bank of New York

New York, NY
5
Star Rating
New York, NY-based Safra National Bank of New York is an FDIC-insured bank started in 1987. The bank has equity of $747.8 million on assets of $7.59 billion, according to June 30, 2017, regulatory filings.

U.S. bank customers have $6.25 billion on deposit at 2 offices in multiple states run by 244 full-time employees. With that footprint, the bank has amassed loans and leases worth $2.79 billion, including $1.29 billion worth of real estate loans.

Overall, Bankrate believes that, as of June 30, 2017, Safra National Bank of New York exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three major criteria Bankrate used to evaluate American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for depositors during periods of economic instability for the bank. It follows then that a bank's level of capital is an essential measurement of an institution's financial fortitude. When it comes to safety and soundness, more capital is better.
On our test to measure the adequacy of a bank's capital, Safra National Bank of New York received a score of 10 out of a possible 30 points, failing to reach the national average of 13.38.

A bank's Tier 1 capital ratio is an important measure of this buffer. Safra National Bank of New York's Tier 1 capital ratio was 14.61 percent, above the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather economic downturns.

Overall, Safra National Bank of New York held equity amounting to 9.86 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

Having a large number of these types of assets means a bank could have to use capital to cover losses, reducing its equity buffer. 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 asset quality test, Safra National Bank of New York scored 40 out of a possible 40 points, better than 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 Safra National Bank of New York'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 to deal with troubled assets known as an "allowance for loan and lease losses." 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 problematic loans. Unfortunately, the FDIC did not provide information on Safra National Bank of New York'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, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Obviously, banks that are losing money have less ability to do those things.

Safra National Bank of New York outperformed the average on Bankrate's test of earnings, achieving a score of 24 out of a possible 30.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Safra National Bank of New York's most recent annualized quarterly return on equity was 15.93 percent, above the national average of 9.28 percent.

The bank earned net income of $56.6 million on total equity of $747.8 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.46 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.