Safety & Soundness

at Luther Burbank Savings

Updated 01/30/24

Events in the banking industry during 2023 have left many people with questions. We want to help answer those questions as they pertain to Luther Burbank Savings.

First and foremost, Luther Burbank Savings is a well-capitalized, FDIC-insured financial institution, and our team members are here to serve your banking needs.

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A well-capitalized institution

Luther Burbank Savings was founded in 1983. As of 12/31/2023, Luther Burbank Savings had $8.2 billion in assets, and our capital remains strong and well above all regulatory capital requirements. The table reflects Luther Burbank Savings’ capital ratios as of 12/31/2023 compared to the required regulatory limits for a “well-capitalized” institution.

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A 5-star rating by BauerFinancial

BauerFinancial, an independent research firm, ranks banks based on financial information that is reported to their regulators. In 2024, Luther Burbank Savings received yet another 5-Star (Superior) quarterly rating from BauerFinancial.

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Sufficient liquidity to support customer withdrawals

As of 12/31/2023, Luther Burbank Savings had sufficient on-balance sheet liquidity to support customer withdrawals or transactions of over $1.2 billion, and we had immediate access to other liquidity sources from the Federal Home Loan Bank and Federal Reserve Bank of $2.2 billion, as additional contingency funding sources, if needed.

The credit quality of our loan portfolio remains strong

We make loans primarily for residential housing, including multifamily and single-family properties. The credit quality of our loan portfolio remains strong due to the significant gap between the supply and demand of affordable housing in our markets. That gap is the result of a resilient single-family housing market and high occupancy levels in the multifamily properties that collateralize the majority of our loans.

Luther Burbank Savings is different when compared to some of the banks in the news.

Luther Burbank Savings does not have (and has never had) any exposure to crypto-currency. We also do not have (and have never had) any exposure to venture capital.

At 12/31/2023, Luther Burbank Savings held $530 million in available-for-sale investment securities on its balance sheet.

These assets are marked to fair market value each month. Luther Burbank Savings has a very small amount of investments totaling $2.9 million (or 0.03% of total assets) in the “held to maturity” category. Investments that are in the “held to maturity” category are not marked to fair market value because the expectation is that the institution holding them has the intent and ability to hold these investments until they mature. Recently, some financial institutions have taken significant losses as a result of the need to sell investments in their “held to maturity” investment portfolio in order to generate liquidity. Since interest rates have risen at an unprecedented pace and because these securities were not being held at fair market value, the institutions incurred significant losses when they were sold. Again, Luther Burbank Savings has a very small amount of “held to maturity” investments.

Luther Burbank Savings is an FDIC insured bank.

The standard FDIC insurance amount is $250,000 per depositor for each account ownership category. In addition, our branch team members provide their expertise to our customers on a daily basis regarding how to secure additional FDIC coverage - either through appropriate account ownership or through our Insured Deposit Marketplace (IDM) program that provides FDIC coverage for deposits up to $50 million.

“The U.S. banking system is sound and resilient,” affirms the Federal Open Market Committee and the Board of Governors of the Federal Reserve System in a joint statement on December 13, 2023.

This joint statement confirms similar statements made by Jerome H. Powell, Chair of the Federal Reserve Board, including on July 27, 2023, “The U.S. banking system is sound and resilient, with strong levels of capital and liquidity. A robust and dynamic banking system, along with effective and efficient regulation and supervision, helps to ensure that banks of all sizes can meet the needs of households and businesses in every community throughout our country, in good times and in bad. We must preserve and build upon these strengths and that diversity.”

Luther Burbank Savings is committed to providing best-in-class banking solutions for you and our team members are always available should you have any questions.