Safe and Sound

Banco Popular North America

New York, NY
Star Rating
Started in 1999, Banco Popular North America is an FDIC-insured bank based in New York, NY. The bank has equity of $1.85 billion on $8,973,930,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the work of 671 full-time employees in 53 offices in multiple states, the bank holds loans and leases worth $5.79 billion, including $4.60 billion worth of real estate loans. The bank currently holds $6.40 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Banco Popular North America exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three major criteria Bankrate used to grade American banks.


Find out


Capital Score

Capital acts as a cushion against losses and provides protection for accountholders when a bank is experiencing economic trouble. It follows then that when it comes to measuring an a bank's financial strength, capital is important. When it comes to safety and soundness, more capital is preferred.
Banco Popular North America racked up 26 out of a possible 30 points on our test to measure capital adequacy, above the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Banco Popular North America's Tier 1 capital ratio was 17.26 percent, exceeding the 6 percent level considered adequate by regulators, but lower than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial difficulties.

Overall, Banco Popular North America held equity amounting to 20.60 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

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

A bank with lots of these kinds of assets may eventually have to use capital to cover losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, decreasing earnings and elevating the risk of a failure in the future.

On Bankrate's test of asset quality, Banco Popular North America scored 36 out of a possible 40 points, failing to reach the national average of 37.62 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, 1.99 percent of Banco Popular North America's loans were noncurrent, meaning 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 known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a widely used 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 Banco Popular North America's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, 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.

Banco Popular North America received below-average marks on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

One widely used way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for Banco Popular North America was 2.36 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $21.7 million on total equity of $1.85 billion. The bank reported an annualized return on average assets, or ROA, of 0.49 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?'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 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.