Safe and Sound

Beal Bank, SSB

Plano, TX
5
Star Rating
Founded in 1988, Beal Bank, SSB is an FDIC-insured bank based in Plano, TX. The bank holds equity of $635.7 million on $1.89 billion in assets, according to December 31, 2017, regulatory filings.

With 251 full-time employees in 19 offices in multiple states, the bank currently holds loans and leases worth $1.39 billion, including real estate loans of $1.06 billion. U.S. bank customers currently have $1.17 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 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 fared on the three major criteria Bankrate used to grade American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for depositors when a bank is experiencing financial trouble. Therefore, a bank's level of capital is a useful measurement of a bank's financial fortitude. When looking at safety and soundness, more capital is preferred.

Beal Bank, SSB achieved a score of 30 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 13.13.

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 43.42 percent, above the 6 percent level regulators consider adequate, and higher than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial downturns.

Overall, Beal Bank, SSB held equity amounting to 33.65 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

A bank with large numbers of these types of assets may eventually have to use capital to absorb losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, Beal Bank, SSB scored 24 out of a possible 40 points, coming in below the national average of 37.49 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 17.31 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 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. 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 earnings performance has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

On Bankrate's test of earnings, Beal Bank, SSB scored 26 out of a possible 30, better than the national average of 15.12.

One key way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for Beal Bank, SSB was 16.23 percent, above the national average of 8.10 percent.

The bank reported net income of $113.4 million on total equity of $635.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 5.30 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 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.