Additional Factors: Institutions with a small asset base or a short operating history can represent an instability risk beyond what their financial ratios indicate. Libertad Bank has a relatively low asset base.
The Texas Ratio is an indicator of how much funds a bank has available compared to the total value of loans considered at risk. As of December 31, 2013 Libertad Bank had $303,000 in non-current loans and owned real-estate with $6.82 million in equity and loan loss allowances on hand to cover it. This gives Libertad Bank a Texas Ratio of 4.44% which is excellent. Any bank with a Texas Ratio near or greater than 100% is considered at risk.
The Texas Ratio for Libertad Bank experienced no significant changes from 3.64% as of December 31, 2012 to 4.44% as of December 31, 2013, resulting in a negative change of 21.96%. This indicates that the balance sheet and financial strength for Libertad Bank has had no significant changes in recent periods.
In the past year, Libertad Bank has increased its total deposits by $12.36 million, resulting in 38.88% growth for the year. A strong track record of growth is an indicator of consumer confidence and the bank's ability to strengthen its balance sheet. The growth Libertad Bank has shown is excellent.
Both FDIC and NCUA consider capitalization levels of banks and credit unions to be of high importance. Higher capitalization allows for a greater buffer when cover loans that may fail in the future. Libertad Bank has $55.62 million in assets with $6.82 million in equity, resulting in a capitalization level of 12.26%, which is excellent.