Safe and Sound

TBK BANK, SSB

Dallas, TX
4
Star Rating
TBK BANK, SSB is a Dallas, TX-based, FDIC-insured bank founded in 1981. Regulatory filings show the bank having equity of $332.9 million on $2,804,711,000 in assets, as of June 30, 2017.

U.S. bank customers have $2.10 billion on deposit at 39 offices in multiple states run by 706 full-time employees. With that footprint, the bank holds loans and leases worth $2.26 billion, including real estate loans of $900.2 million.

Overall, Bankrate believes that, as of June 30, 2017, TBK BANK, SSB exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three important criteria Bankrate used to score U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for depositors when a bank is experiencing economic trouble. Therefore, a bank's level of capital is a valuable measurement of a bank's financial resilience. When looking at safety and soundness, the more capital, the better.
TBK BANK, SSB came in below the national average of 13.38 on our test to measure the adequacy of a bank's capital, scoring 12 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. TBK BANK, SSB's Tier 1 capital ratio was 11.31 percent, higher than the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial headwinds.

Overall, TBK BANK, SSB held equity amounting to 11.87 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate how the bank's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

Having extensive holdings of these types of assets means a bank may eventually have to use capital to absorb losses, diminishing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

TBK BANK, SSB scored 36 out of a possible 40 points on Bankrate's asset quality test, falling short of the national average of 37.62.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 1.22 percent of TBK 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." How large that reserve is can be a useful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on TBK BANK, SSB's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.

TBK BANK, SSB scored 14 out of a possible 30 on Bankrate's earnings test, below the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for TBK BANK, SSB was 6.90 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $11.2 million on total equity of $332.9 million. The bank reported an annualized return on average assets, or ROA, of 0.84 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.