Safe and Sound

Englewood Bank & Trust

Englewood, FL
5
Star Rating
Founded in 1988, Englewood Bank & Trust is an FDIC-insured bank based in Englewood, FL. As of December 31, 2017, the bank had equity of $24.2 million on $282.2 million in assets.

Thanks to the efforts of 51 full-time employees in 4 offices in FL, the bank has amassed loans and leases worth $164.6 million, including real estate loans of $159.4 million. U.S. bank customers currently have $257.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Englewood Bank & Trust 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 U.S. banks on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for depositors during times of financial trouble for the bank. Therefore, when it comes to measuring an a bank's financial fortitude, capital is valuable. When it comes to safety and soundness, more capital is better.

Englewood Bank & Trust received a score of 8 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 13.13.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Englewood Bank & Trust's Tier 1 capital ratio was 15.12 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial downturns.

Overall, Englewood Bank & Trust held equity amounting to 8.56 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

Having extensive holdings of these kinds of assets suggests a bank could have to use capital to absorb losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and elevating the chances of a failure in the future.

On Bankrate's asset quality test, Englewood Bank & Trust scored 36 out of a possible 40 points, failing to reach 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, 0.38 percent of Englewood Bank & Trust'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the reserve's size to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Englewood Bank & Trust's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.

Englewood Bank & Trust scored 30 out of a possible 30 on Bankrate's test of earnings, above the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. Englewood Bank & Trust's most recent annualized quarterly return on equity was 23.36 percent, above the national average of 8.10 percent.

The bank recorded net income of $5.4 million on total equity of $24.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.99 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.