Safe and Sound

TotalBank

Miami, FL
4
Star Rating
TotalBank is an FDIC-insured bank founded in 1974 and currently headquartered in Miami, FL. The bank has equity of $490.8 million on assets of $3.00 billion, according to June 30, 2017, regulatory filings.

With 303 full-time employees in 19 offices in FL, the bank has amassed loans and leases worth $2.16 billion, including real estate loans of $1.94 billion. U.S. bank customers currently have $2.15 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, TotalBank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three important criteria Bankrate used to grade U.S. banks.

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 strength, capital is important. It works as a cushion against losses and affords protection for accountholders when a bank is struggling financially. When looking at safety and soundness, more capital is preferred.
TotalBank did better than the national average of 13.38 points on our test to measure capital adequacy, receiving a score of 14 out of a possible 30 points.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. TotalBank's Tier 1 capital ratio was 17.21 percent, above the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather financial challenges.

Overall, TotalBank held equity amounting to 16.36 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having lots of these types of assets means a bank may have to use capital to absorb losses, decreasing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, decreasing earnings and elevating the risk of a future failure.

TotalBank scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 0.55 percent of TotalBank'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 1.04 percent.

Banks maintain 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 problematic loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on TotalBank'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, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.

On Bankrate's test of earnings, TotalBank scored 10 out of a possible 30, lower than the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. TotalBank's most recent annualized quarterly return on equity was 4.97 percent, below the national average of 9.28 percent.

The bank earned net income of $12.0 million on total equity of $490.8 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.81 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.