Safe and Sound

Desjardins Bank, National Association

Hallandale, FL
4
Star Rating
Desjardins Bank, National Association is a Hallandale, FL-based, FDIC-insured bank started in 1992. As of December 31, 2017, the bank held equity of $29.8 million on assets of $219.2 million.

Thanks to the work of 63 full-time employees in 4 offices in FL, the bank currently holds loans and leases worth $159.2 million, $148.5 million of which are for real estate. U.S. bank customers currently have $182.8 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Desjardins Bank, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three major criteria Bankrate used to grade U.S. banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for account holders when a bank is experiencing economic instability. It follows then that when it comes to measuring an a bank's financial stability, capital is essential. When it comes to safety and soundness, the more capital, the better.

On our test to measure the adequacy of a bank's capital, Desjardins Bank, National Association achieved a score of 18 out of a possible 30 points, exceeding the national average of 13.13.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Desjardins Bank, National Association's Tier 1 capital ratio was 27.60 percent, above the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial downturns.

Overall, Desjardins Bank, National Association held equity amounting to 13.61 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

A bank with extensive holdings of these types of assets may eventually have to use capital to cover losses, decreasing 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 money, pushing down earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, Desjardins Bank, National Association scored 40 out of a possible 40 points, exceeding the national average of 37.49 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.76 percent of Desjardins 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 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . The size of that reserve can be a handy 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 Desjardins Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.

On Bankrate's earnings test, Desjardins Bank, National Association scored 4 out of a possible 30, below the national average of 15.12.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for Desjardins Bank, National Association was 1.77 percent, below the national average of 8.10 percent.

The bank earned net income of $523,000 on total equity of $29.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.25 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.