Safe and Sound

Beal Bank USA

Las Vegas, NV
5
Star Rating
Founded in 2004, Beal Bank USA is an FDIC-insured bank based in Las Vegas, NV. The bank holds equity of $2.24 billion on assets of $5.30 billion, according to June 30, 2017, regulatory filings.

U.S. bank customers have $2.73 billion on deposit at 23 offices in multiple states run by 130 full-time employees. With that footprint, the bank holds loans and leases worth $3.73 billion, $1.18 billion of which are for real estate.

Overall, Bankrate believes that, as of June 30, 2017, Beal Bank USA exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the bank did on the three important criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial resilience, capital is essential. It works as a bulwark against losses and affords protection for accountholders during periods of economic trouble for the bank. From a safety and soundness perspective, the more capital, the better.
Beal Bank USA exceeded the national average of 13.38 points on our test to measure capital adequacy, receiving a score of 30 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. Beal Bank USA's Tier 1 capital ratio was 39.09 percent, exceeding the 6 percent level considered adequate by regulators, and higher than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather financial challenges.

Overall, Beal Bank USA held equity amounting to 42.17 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

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

A bank with large numbers of these kinds of assets could eventually have to use capital to cover 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 interest for the bank, resulting in depressed earnings and potentially more risk of a future failure.

Beal Bank USA scored 28 out of a possible 40 points on Bankrate's asset quality test, falling short of the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of June 30, 2017, 13.62 percent of Beal Bank USA'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 1.04 percent.

Banks keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." Comparing the that reserve's size to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Beal Bank USA's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.

On Bankrate's test of earnings, Beal Bank USA scored 20 out of a possible 30, above the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important measure of a bank's earnings. Beal Bank USA's most recent annualized quarterly return on equity was 11.96 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $119.5 million on total equity of $2.24 billion. The bank experienced an annualized return on average assets, or ROA, of 4.52 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.