Safe and Sound

Golden Bank, National Association

Houston, TX
5
Star Rating
Golden Bank, National Association is an FDIC-insured bank founded in 1985 and currently headquartered in Houston, TX. Regulatory filings show the bank having equity of $105.4 million on assets of $806.2 million, as of December 31, 2017.

Thanks to the efforts of 113 full-time employees in 7 offices in multiple states, the bank currently holds loans and leases worth $610.4 million, including $598.8 million worth of real estate loans. The bank currently holds $648.2 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Golden Bank, National Association exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three major criteria Bankrate used to evaluate 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 affords protection for account holders during times of economic instability for the bank. It follows then that a bank's level of capital is an essential measurement of an institution's financial resilience. When it comes to safety and soundness, the higher the capital, the better.

Golden Bank, National Association racked up 18 out of a possible 30 points on our test to measure the adequacy of a bank's capital, exceeding the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Golden Bank, National Association's Tier 1 capital ratio was 15.56 percent, higher than the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial challenges.

Overall, Golden Bank, National Association held equity amounting to 13.07 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due loans.

Having lots of these kinds of assets means a bank could have to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, decreasing earnings and elevating the chances of a future failure.

On Bankrate's test of asset quality, Golden Bank, National Association 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 handy indicator of asset quality.As of December 31, 2017, 0.51 percent of Golden 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 maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." 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 Golden Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.

On Bankrate's test of earnings, Golden Bank, National Association scored 18 out of a possible 30, above the national average of 15.12.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Golden Bank, National Association's most recent annualized quarterly return on equity was 8.66 percent, above the national average of 8.10 percent.

The bank reported net income of $8.8 million on total equity of $105.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.14 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.