Safe and Sound

Goldwater Bank, N.A.

Scottsdale, AZ
3
Star Rating
Goldwater Bank, N.A. is an FDIC-insured bank founded in 2007 and currently headquartered in Scottsdale, AZ. Regulatory filings show the bank having equity of $12.6 million on $192.7 million in assets, as of December 31, 2017.

Thanks to the efforts of 432 full-time employees, the bank holds loans and leases worth $161.9 million, including real estate loans of $155.0 million. The bank currently holds $143.5 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Goldwater Bank, N.A. exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial fortitude. It acts as a cushion against losses and affords protection for depositors during times of financial instability for the bank. From a safety and soundness perspective, the more capital, the better.

Goldwater Bank, N.A. scored below the national average of 13.13 on our test to measure capital adequacy, achieving a score of 4 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Goldwater Bank, N.A.'s Tier 1 capital ratio was 12.70 percent, exceeding the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic downturns.

Overall, Goldwater Bank, N.A. held equity amounting to 6.52 percent of its assets, which was lower than 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 troubled assets, such as past-due mortgages.

Having a large number of these kinds of assets may eventually require a bank to use capital to cover 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, resulting in reduced earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, Goldwater Bank, N.A. scored 36 out of a possible 40 points, below 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, 0.59 percent of Goldwater Bank, N.A.'s loans were noncurrent, meaning 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 . That reserve's size can be a widely used indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Goldwater Bank, N.A.'s loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.

On Bankrate's test of earnings, Goldwater Bank, N.A. scored 12 out of a possible 30, less than the national average of 15.12.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Goldwater Bank, N.A.'s most recent annualized quarterly return on equity was 5.84 percent, below the national average of 8.10 percent.

The bank recorded net income of $675,000 on total equity of $12.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.40 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.