Safe and Sound

Cross River Bank

Teaneck, NJ
5
Star Rating
Teaneck, NJ-based Cross River Bank is an FDIC-insured bank started in 2008. Regulatory filings show the bank having equity of $107.6 million on $1.37 billion in assets, as of December 31, 2017.

With 157 full-time employees, the bank has amassed loans and leases worth $661.0 million, including real estate loans of $255.9 million. U.S. bank customers currently have $1.20 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Cross River Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three major criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial resilience, capital is valuable. It works as a bulwark against losses and provides protection for depositors when a bank is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

Cross River Bank scored below the national average of 13.13 on our test to measure capital adequacy, achieving a score of 6 out of a possible 30 points.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Cross River Bank's Tier 1 capital ratio was 17.38 percent, higher than the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic challenges.

Overall, Cross River Bank held equity amounting to 7.84 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as past-due loans, on the bank's capitalization and allocated loan loss reserves.

A bank with lots of these kinds of assets could 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 no longer earning interest for the bank, pushing down earnings and increasing the chances of a failure in the future.

On Bankrate's asset quality test, Cross River Bank scored 40 out of a possible 40 points, beating out the national average of 37.49 points.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, none of Cross River Bank's loans were noncurrent -- in other words, 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 keep a reserve to deal with problem assets known as an "allowance for loan and lease losses." That reserve's size can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Cross River Bank's loan loss allowance was 156,416.67 percent of its total noncurrent loans, exceeding the national average. All else being equal, a higher ratio of loan loss allowance to noncurrent loans is better.

Earnings score

How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses lessen a bank's ability to do those things.

On Bankrate's earnings test, Cross River Bank scored 30 out of a possible 30, above the national average of 15.12.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for Cross River Bank was 27.17 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $25.6 million on total equity of $107.6 million. The bank reported an annualized return on average assets, or ROA, of 3.02 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.