Safe and Sound

Woori America Bank

New York, NY
4
Star Rating
New York, NY-based Woori America Bank is an FDIC-insured bank founded in 1984. As of December 31, 2017, the bank had equity of $249.5 million on $1.82 billion in assets.

U.S. bank customers have $1.54 billion on deposit at 19 offices in multiple states run by 223 full-time employees. With that footprint, the bank currently holds loans and leases worth $1.41 billion, including real estate loans of $1.30 billion.

Overall, Bankrate believes that, as of December 31, 2017, Woori America Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three major criteria Bankrate used to score American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for depositors during times of economic instability for the bank. It follows then that when it comes to measuring an a bank's financial fortitude, capital is important. When looking at safety and soundness, more capital is preferred.

On our test to measure the adequacy of a bank's capital, Woori America Bank achieved a score of 18 out of a possible 30 points, beating out the national average of 13.13.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Woori America Bank's Tier 1 capital ratio was 17.92 percent, higher than the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic headwinds.

Overall, Woori America Bank held equity amounting to 13.73 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as past-due loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these types of assets could eventually force a bank to use capital to cover losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, pushing down earnings and elevating the chances of a failure in the future.

On Bankrate's test of asset quality, Woori America Bank scored 40 out of a possible 40 points, exceeding the national average of 37.49 points.

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, 0.41 percent of Woori America Bank'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 to deal with problem assets known as an "allowance for loan and lease losses." The size of that reserve can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Woori America Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.

Woori America Bank scored 8 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one key measure of a bank's earnings. Woori America Bank's most recent annualized quarterly return on equity was 4.82 percent, below the national average of 8.10 percent.

The bank reported net income of $9.8 million on total equity of $249.5 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.56 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.