Safe and Sound

M.Y. SAFRA BANK, FSB

3
Star Rating
Started in 2000, M.Y. SAFRA BANK, FSB is an FDIC-insured bank based in New York, NY. The bank holds equity of $40.0 million on $295.8 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 25 full-time employees, the bank holds loans and leases worth $199.5 million, including $142.3 million worth of real estate loans. U.S. bank customers currently have $253.8 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, M.Y. SAFRA BANK, FSB exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three major criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for account holders during periods of economic instability for the bank. It follows then that when it comes to measuring an a bank's financial fortitude, capital is essential. When it comes to safety and soundness, the higher the capital, the better.

M.Y. SAFRA BANK, FSB did better than the national average of 13.13 points on our test to measure the adequacy of a bank's capital, scoring 18 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. M.Y. SAFRA BANK, FSB's Tier 1 capital ratio was 20.16 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 headwinds.

Overall, M.Y. SAFRA BANK, FSB held equity amounting to 13.53 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as past-due mortgages, on the bank's capitalization and allocated loan loss reserves.

A bank with extensive holdings of these kinds of assets may eventually have to use capital to absorb 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 interest for the bank, resulting in depressed earnings and potentially more risk of a future failure.

M.Y. SAFRA BANK, FSB scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 0.01 percent of M.Y. SAFRA BANK, FSB'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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the size of that reserve to the total amount of problematic loans can be a handy indicator when evaluating a bank's ability to manage problem assets. M.Y. SAFRA BANK, FSB's loan loss allowance was 19,008.33 percent of its total noncurrent loans, higher than the national average. All else being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or put them to work addressing 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.

M.Y. SAFRA BANK, FSB fell short of the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for M.Y. SAFRA BANK, FSB was -7.40 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $-2.9 million on total equity of $40.0 million. The bank had an annualized return on average assets, or ROA, of -1.04 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.