Safe and Sound

Beal Bank, SSB

Plano, TX
5
Star Rating
Beal Bank, SSB is an FDIC-insured bank started in 1988 and currently headquartered in Plano, TX. The bank holds equity of $573.4 million on $2,122,168,000 in assets, according to June 30, 2017, regulatory filings.

U.S. bank customers have $1.41 billion on deposit at 19 offices in multiple states run by 255 full-time employees. With that footprint, the bank currently holds loans and leases worth $1.62 billion, $1.22 billion of which are for real estate.

Overall, Bankrate believes that, as of June 30, 2017, Beal Bank, SSB exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank faired on the three important criteria Bankrate used to score American banks on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a bank's financial resilience. It acts as a cushion against losses and as protection for depositors when a bank is experiencing economic instability. When looking at safety and soundness, the higher the capital, the better.
On our test to measure the adequacy of a bank's capital, Beal Bank, SSB racked up 30 out of a possible 30 points, beating out the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Beal Bank, SSB's Tier 1 capital ratio was 35.93 percent, above the 6 percent level regulators consider adequate, and exceeding the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to economic difficulties.

Overall, Beal Bank, SSB held equity amounting to 27.02 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

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

A bank with a large number of these types of assets may eventually be required to use capital to cover losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, diminishing earnings and increasing the chances of a failure in the future.

Beal Bank, SSB fell below the national average of 37.62 on Bankrate's asset quality test, racking up 28 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 10.13 percent of Beal Bank, SSB's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the that reserve's size to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Beal Bank, SSB's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, likely making the bank better able to withstand economic shocks. Losses, on the other hand, take away from a bank's ability to do those things.

Beal Bank, SSB scored 30 out of a possible 30 on Bankrate's test of earnings, above the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Beal Bank, SSB's most recent annualized quarterly return on equity was 16.40 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $61.4 million on total equity of $573.4 million. The bank had an annualized return on average assets, or ROA, of 5.47 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 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.