Safe and Sound

Stonegate Bank

Pompano Beach, FL
4
Star Rating
Stonegate Bank is a Pompano Beach, FL-based, FDIC-insured bank that opened its doors in 2005. Regulatory filings show the bank having equity of $417.8 million on $3,133,980,000 in assets, as of June 30, 2017.

With 314 full-time employees in 34 offices in FL, the bank currently holds loans and leases worth $2.44 billion, including real estate loans of $2.04 billion. U.S. bank customers currently have $2.62 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Stonegate Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank faired 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 valuable measurement of a bank's financial strength. It acts as a cushion against losses and as protection for accountholders when a bank is experiencing financial trouble. When it comes to safety and soundness, the more capital, the better.
On our test to measure capital adequacy, Stonegate Bank received a score of 12 out of a possible 30 points, failing to reach the national average of 13.38.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Stonegate Bank's Tier 1 capital ratio was 11.53 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial difficulties.

Overall, Stonegate Bank held equity amounting to 13.33 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid loans.

A bank with large numbers of these kinds of assets may eventually be forced 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 thus aren't earning money, pushing down earnings and increasing the risk of a failure in the future.

Stonegate Bank scored above the national average of 37.62 on Bankrate's asset quality test, racking up 40 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 June 30, 2017, 0.46 percent of Stonegate 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 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . The size of that reserve can be a useful 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 Stonegate Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, likely making the bank better able to withstand financial shocks. Obviously, banks that are losing money are less able to do those things.

On Bankrate's earnings test, Stonegate Bank scored 16 out of a possible 30, lower than the national average of 16.52.

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. Stonegate Bank's most recent annualized quarterly return on equity was 8.28 percent, below the national average of 9.28 percent.

The bank reported net income of $16.3 million on total equity of $417.8 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.06 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 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.