Safe and Sound

Lone Star Capital Bank, National Association

San Antonio, TX
4
Star Rating
Founded in 1999, Lone Star Capital Bank, National Association is an FDIC-insured bank based in San Antonio, TX. Regulatory filings show the bank having equity of $32.3 million on assets of $246.4 million, as of June 30, 2017.

With 66 full-time employees in 8 offices in TX, the bank has amassed loans and leases worth $168.0 million, including real estate loans of $140.3 million. U.S. bank customers currently have $206.6 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Lone Star Capital Bank, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to evaluate U.S. banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for accountholders when a bank is experiencing financial instability. It follows then that a bank's level of capital is a valuable measurement of a bank's financial resilience. When looking at safety and soundness, the higher the capital, the better.
Lone Star Capital Bank, National Association received a score of 12 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 13.38.

A bank's Tier 1 capital ratio is an essential measure of this buffer. Lone Star Capital Bank, National Association's Tier 1 capital ratio was 13.62 percent, exceeding the 6 percent level considered adequate by regulators, but below the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to economic difficulties.

Overall, Lone Star Capital Bank, National Association held equity amounting to 13.09 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

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

A bank with a large number of these kinds of assets may eventually be forced to use capital to absorb losses, cutting down on its equity cushion. 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 future failure.

On Bankrate's test of asset quality, Lone Star Capital Bank, National Association scored 40 out of a possible 40 points, beating the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, none of Lone Star Capital Bank, National Association'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 1.04 percent.

Banks keep a reserve to handle problem assets known as an "allowance for loan and lease losses." How large that reserve is can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Lone Star Capital Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial trouble. Conversely, losses lessen a bank's ability to do those things.

Lone Star Capital Bank, National Association underperformed the average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. Lone Star Capital Bank, National Association's most recent annualized quarterly return on equity was 3.55 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $564,000 on total equity of $32.3 million. The bank experienced an annualized return on average assets, or ROA, of 0.46 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.