Safe and Sound

KEB Hana Bank USA, National Association

4
Star Rating
Fort Lee, NJ-based KEB Hana Bank USA, National Association is an FDIC-insured bank started in 1986. As of December 31, 2017, the bank held equity of $45.9 million on $208.6 million in assets.

Thanks to the work of 50 full-time employees in 3 offices in multiple states, the bank has amassed loans and leases worth $129.9 million, including $132.2 million worth of real estate loans. U.S. bank customers currently have $161.0 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, KEB Hana Bank USA, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to score U.S. banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of a bank's financial resilience. It acts as a bulwark against losses and as protection for depositors when a bank is struggling financially. From a safety and soundness perspective, the more capital, the better.

KEB Hana Bank USA, National Association achieved a score of 30 out of a possible 30 points on our test to measure the adequacy of a bank's capital, beating out the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. KEB Hana Bank USA, National Association's Tier 1 capital ratio was 31.58 percent, above the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic difficulties.

Overall, KEB Hana Bank USA, National Association held equity amounting to 22.01 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

Having a large number of these types of assets means a bank could eventually have to use capital to absorb losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, pushing down earnings and elevating the risk of a future failure.

KEB Hana Bank USA, National Association exceeded the national average of 37.49 on Bankrate's asset quality test, racking up 40 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 December 31, 2017, 2.07 percent of KEB Hana Bank USA, National Association'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 1.01 percent.

Banks keep a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing how large that reserve is 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 KEB Hana Bank USA, National Association'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 cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.

On Bankrate's test of earnings, KEB Hana Bank USA, National Association scored 0 out of a possible 30, below the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. KEB Hana Bank USA, National Association's most recent annualized quarterly return on equity was -5.64 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $-2.6 million on total equity of $45.9 million. The bank reported an annualized return on average assets, or ROA, of -1.21 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.