Safe and Sound

United Bank of Philadelphia

Philadelphia, PA
NR
Star Rating
Founded in 1992, United Bank of Philadelphia is an FDIC-insured bank headquartered in Philadelphia, PA. As of June 30, 2017, the bank held equity of $3.0 million on assets of $55.6 million.

With 23 full-time employees in 4 offices in PA, the bank currently holds loans and leases worth $37.9 million, including real estate loans of $30.9 million. U.S. bank customers currently have $52.4 million in deposits with the bank.

Overall, Bankrate did not have enough information on this institution to give it a star rating. Keep reading for a breakdown of how the bank faired on the three key criteria Bankrate used to score American banks.

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 when a bank is experiencing economic instability. Therefore, when it comes to measuring an an institution's financial stability, capital is valuable. When it comes to safety and soundness, more capital is preferred.
United Bank of Philadelphia came in below the national average of 13.38 on our test to measure the adequacy of a bank's capital, receiving a score of 0 out of a possible 30 points.

One important measure of this buffer is a bank's Tier 1 capital ratio. United Bank of Philadelphia's Tier 1 capital ratio was 9.02 percent, above the 6 percent level regulators consider adequate, but under the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to financial downturns.

Overall, United Bank of Philadelphia held equity amounting to 5.40 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid mortgages, 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 cover losses, diminishing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, pushing down earnings and elevating the risk of a failure in the future.

United Bank of Philadelphia came in below the national average of 37.62 on Bankrate's asset quality test, racking up 0 out of a possible 40 points .

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 7.96 percent of United Bank of Philadelphia's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks maintain a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing the the size of that reserve to the total amount of problem loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on United Bank of Philadelphia's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.

United Bank of Philadelphia scored 0 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 16.52.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. United Bank of Philadelphia's most recent annualized quarterly return on equity was -21.80 percent, below the national average of 9.28 percent.

The bank earned net income of $-318,000 on total equity of $3.0 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of -1.17 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.