Safe and Sound

Bank of Whittier, National Association

Whittier, CA
5
Star Rating
Whittier, CA-based Bank of Whittier, National Association is an FDIC-insured bank founded in 1982. The bank has equity of $10.3 million on assets of $56.0 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 22 full-time employees in 2 offices in multiple states, the bank currently holds loans and leases worth $26.2 million, including $26.9 million worth of real estate loans. The bank currently holds $45.1 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Bank of Whittier, National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three important criteria Bankrate used to score American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial resilience. It works as a cushion against losses and as protection for accountholders when a bank is experiencing economic instability. From a safety and soundness perspective, the more capital, the better.

Bank of Whittier, National Association scored above the national average of 13.13 points on our test to measure capital adequacy, racking up 22 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Bank of Whittier, National Association's Tier 1 capital ratio was 22.48 percent, higher than the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial difficulties.

Overall, Bank of Whittier, National Association held equity amounting to 18.40 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid loans.

Having a large number of these kinds of assets may eventually require a bank to use capital to cover losses, decreasing 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 future failure.

Bank of Whittier, National Association scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, none of Bank of Whittier, National Association'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 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . That reserve's size can be a handy 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 Bank of Whittier, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.

Bank of Whittier, National Association scored 8 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. Bank of Whittier, National Association's most recent annualized quarterly return on equity was 3.42 percent, below the national average of 8.10 percent.

The bank recorded net income of $345,000 on total equity of $10.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.59 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.