Safe and Sound

Mizuho Bank (USA)

New York, NY
5
Star Rating
Mizuho Bank (USA) is an FDIC-insured bank founded in 1974 and currently based in New York, NY. Regulatory filings show the bank having equity of $1.35 billion on assets of $6.74 billion, as of December 31, 2017.

Thanks to the efforts of 590 full-time employees in 3 offices in multiple states, the bank currently holds loans and leases worth $4.18 billion, including $121.5 million worth of real estate loans. The bank currently holds $3.93 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Mizuho Bank (USA) exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three key criteria Bankrate used to evaluate U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for account holders during periods of financial trouble for the bank. It follows then that a bank's level of capital is a key measurement of a bank's financial strength. When looking at safety and soundness, the higher the capital, the better.

Mizuho Bank (USA) scored 30 out of a possible 30 points on our test to measure capital adequacy, above the national average of 13.13.

A bank's Tier 1 capital ratio is an essential measure of this buffer. Mizuho Bank (USA)'s Tier 1 capital ratio was 24.14 percent, higher than the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial downturns.

Overall, Mizuho Bank (USA) held equity amounting to 20.03 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these types of assets means a bank could have to use capital to absorb losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and increasing the chances of a future failure.

On Bankrate's test of asset quality, Mizuho Bank (USA) scored 40 out of a possible 40 points, better than 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, 0.30 percent of Mizuho Bank (USA)'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 maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of at-risk loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Mizuho Bank (USA)'s loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.

Mizuho Bank (USA) received below-average marks on Bankrate's test of earnings, achieving a score of 2 out of a possible 30.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for Mizuho Bank (USA) was 0.60 percent, below the national average of 8.10 percent.

The bank recorded net income of $8.2 million on total equity of $1.35 billion for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.12 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.