Safe and Sound

Astoria Bank

Long Island City, NY
4
Star Rating
Astoria Bank is an FDIC-insured bank started in 1888 and currently based in Long Island City, NY. The bank has equity of $1.86 billion on $14,068,775,000 in assets, according to June 30, 2017, regulatory filings.

U.S. bank customers have $9.08 billion on deposit at 89 offices in NY run by 1,364 full-time employees. With that footprint, the bank currently holds loans and leases worth $9.83 billion, $9.80 billion of which are for real estate.

Overall, Bankrate believes that, as of June 30, 2017, Astoria Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three major criteria Bankrate used to grade American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for accountholders during times of financial instability for the bank. Therefore, when it comes to measuring an an institution's financial strength, capital is key. From a safety and soundness perspective, more capital is preferred.
Astoria Bank beat out the national average of 13.38 points on our test to measure capital adequacy, scoring 14 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Astoria Bank's Tier 1 capital ratio was 22.28 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather economic challenges.

Overall, Astoria Bank held equity amounting to 13.21 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as past-due loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with a large number of these types of assets may eventually be required to use capital to cover losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, diminishing earnings and increasing the chances of a failure in the future.

On Bankrate's test of asset quality, Astoria Bank scored 36 out of a possible 40 points, lower 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, 1.40 percent of Astoria Bank'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 deal with problem assets known as an "allowance for loan and lease losses." Comparing the that reserve's size 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 Astoria Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.

On Bankrate's test of earnings, Astoria Bank scored 10 out of a possible 30, less than the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Astoria Bank's most recent annualized quarterly return on equity was 4.14 percent, below the national average of 9.28 percent.

The bank recorded net income of $38.9 million on total equity of $1.86 billion for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.55 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.