Safe and Sound

Transportation Alliance Bank, Inc. d/b/a TAB Bank

Ogden, UT
5
Star Rating
Started in 1998, Transportation Alliance Bank, Inc. d/b/a TAB Bank is an FDIC-insured bank headquartered in Ogden, UT. The bank holds equity of $95.4 million on assets of $749.4 million, according to December 31, 2017, regulatory filings.

With 209 full-time employees, the bank has amassed loans and leases worth $592.7 million, including real estate loans of $8.3 million. U.S. bank customers currently have $575.5 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Transportation Alliance Bank, Inc. d/b/a TAB Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank did on the three important criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for depositors during periods of economic trouble for the bank. It follows then that when it comes to measuring an a bank's financial resilience, capital is important. When looking at safety and soundness, more capital is better.

Transportation Alliance Bank, Inc. d/b/a TAB Bank exceeded the national average of 13.13 points on our test to measure capital adequacy, scoring 16 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Transportation Alliance Bank, Inc. d/b/a TAB Bank's Tier 1 capital ratio was 14.16 percent, higher than 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 stand up to financial difficulties.

Overall, Transportation Alliance Bank, Inc. d/b/a TAB Bank held equity amounting to 12.73 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

Having lots of these kinds of assets could eventually require a bank to use capital to absorb losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and increasing the chances of a future failure.

Transportation Alliance Bank, Inc. d/b/a TAB Bank scored below the national average of 37.49 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 1.13 percent of Transportation Alliance Bank, Inc. d/b/a TAB Bank'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 maintain a reserve to handle troubled assets known as an "allowance for loan and lease losses." 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 problem loans. Unfortunately, the FDIC did not provide information on Transportation Alliance Bank, Inc. d/b/a TAB Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses reduce a bank's ability to do those things.

Transportation Alliance Bank, Inc. d/b/a TAB Bank scored 22 out of a possible 30 on Bankrate's earnings test, above the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by the total amount of equity. Transportation Alliance Bank, Inc. d/b/a TAB Bank's most recent annualized quarterly return on equity was 13.51 percent, above the national average of 8.10 percent.

The bank reported net income of $12.5 million on total equity of $95.4 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.78 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.