Safe and Sound

EverTrust Bank

Pasadena, CA
5
Star Rating
Started in 1995, EverTrust Bank is an FDIC-insured bank based in Pasadena, CA. The bank has equity of $162.7 million on $843.9 million in assets, according to December 31, 2017, regulatory filings.

With 101 full-time employees in 7 offices in CA, the bank currently holds loans and leases worth $580.5 million, including real estate loans of $508.2 million. U.S. bank customers currently have $608.5 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, EverTrust Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three major criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for account holders during times of financial trouble for the bank. It follows then that a bank's level of capital is a crucial measurement of a bank's financial strength. When looking at safety and soundness, the higher the capital, the better.

EverTrust Bank exceeded the national average of 13.13 points on our test to measure capital adequacy, scoring 22 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. EverTrust Bank's Tier 1 capital ratio was 20.91 percent, exceeding the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic challenges.

Overall, EverTrust Bank held equity amounting to 19.28 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

A bank with large numbers of these types of assets may eventually be required to use capital to absorb losses, shrinking its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, pushing down earnings and elevating the risk of a failure in the future.

On Bankrate's test of asset quality, EverTrust Bank scored 40 out of a possible 40 points, beating out the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 0.08 percent of EverTrust Bank'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 size of that reserve to the total amount of at-risk loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. EverTrust Bank's loan loss allowance was 1,907.71 percent of its total noncurrent loans, higher than the national average. All things being equal, a higher ratio of loan loss allowance to noncurrent loans is better.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial trouble. Losses, on the other hand, lessen a bank's ability to do those things.

EverTrust Bank received below-average marks on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

One key way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. The most recent annualized quarterly return on equity for EverTrust Bank was 4.79 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $7.6 million on total equity of $162.7 million. The bank experienced an annualized return on average assets, or ROA, of 0.89 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.