Safe and Sound

Bank of Coushatta

Coushatta, LA
5
Star Rating
Coushatta, LA-based Bank of Coushatta is an FDIC-insured bank started in 1897. The bank holds equity of $21.9 million on assets of $210.7 million, according to June 30, 2017, regulatory filings.

Thanks to the work of 37 full-time employees, the bank holds loans and leases worth $72.5 million, including $60.6 million worth of real estate loans. The bank currently holds $161.6 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Bank of Coushatta exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three important criteria Bankrate used to evaluate American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial stability, capital is valuable. It works as a cushion against losses and affords protection for depositors during periods of economic trouble for the bank. When it comes to safety and soundness, the more capital, the better.
On our test to measure capital adequacy, Bank of Coushatta received a score of 12 out of a possible 30 points, below the national average of 13.38.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Bank of Coushatta's Tier 1 capital ratio was 14.97 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather economic challenges.

Overall, Bank of Coushatta held equity amounting to 10.40 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate how the bank's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due mortgages.

Having extensive holdings of these kinds of assets may eventually require a bank to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and elevating the chances of a future failure.

Bank of Coushatta fell below the national average of 37.62 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 handy indicator of asset quality.As of June 30, 2017, 2.66 percent of Bank of Coushatta'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 1.04 percent.

Banks keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." 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 problematic loans. Unfortunately, the FDIC did not provide information on Bank of Coushatta's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank better prepared to withstand economic trouble. Conversely, losses lessen a bank's ability to do those things.

Bank of Coushatta scored 22 out of a possible 30 on Bankrate's earnings test, above the national average of 16.52.

One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for Bank of Coushatta was 13.76 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $1.5 million on total equity of $21.9 million. The bank reported an annualized return on average assets, or ROA, of 1.39 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.