Safe and Sound

Icon Bank of Texas, National Association

Houston, TX
4
Star Rating
Houston, TX-based Icon Bank of Texas, National Association is an FDIC-insured bank founded in 2007. As of December 31, 2017, the bank had equity of $75.3 million on assets of $815.5 million.

With 127 full-time employees in 8 offices in TX, the bank holds loans and leases worth $624.8 million, including real estate loans of $471.4 million. U.S. bank customers currently have $690.5 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Icon Bank of Texas, National Association exhibited a good condition, earning 4 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 score American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for depositors when a bank is struggling financially. Therefore, a bank's level of capital is a useful measurement of an institution's financial fortitude. When looking at safety and soundness, the more capital, the better.

Icon Bank of Texas, National Association received a score of 10 out of a possible 30 points on our test to measure the adequacy of a bank's capital, coming in below the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Icon Bank of Texas, National Association's Tier 1 capital ratio was 11.37 percent, above the 6 percent level considered adequate by regulators, but below the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic headwinds.

Overall, Icon Bank of Texas, National Association held equity amounting to 9.23 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

A bank with lots of these kinds of assets could eventually be required to use capital to cover losses, diminishing its equity buffer. 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, resulting in lower earnings and potentially more risk of a future failure.

Icon Bank of Texas, National Association finished below the national average of 37.49 on Bankrate's asset quality test, racking up 28 out of a possible 40 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, 2.59 percent of Icon Bank of Texas, 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 above the national average of 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . That reserve's size can be a useful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Icon Bank of Texas, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand economic trouble. Conversely, losses lessen a bank's ability to do those things.

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

One widely used way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. Icon Bank of Texas, National Association's most recent annualized quarterly return on equity was 10.13 percent, above the national average of 8.10 percent.

The bank earned net income of $7.3 million on total equity of $75.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.91 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.