Safe and Sound

Cross Keys Bank

Saint Joseph, LA
4
Star Rating
Saint Joseph, LA-based Cross Keys Bank is an FDIC-insured bank founded in 1902. As of June 30, 2017, the bank held equity of $42.6 million on $345,460,000 in assets.

U.S. bank customers have $262.8 million on deposit at 9 offices in LA run by 89 full-time employees. With that footprint, the bank currently holds loans and leases worth $220.4 million, $155.2 million of which are for real estate.

Overall, Bankrate believes that, as of June 30, 2017, Cross Keys Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank faired on the three key criteria Bankrate used to grade U.S. banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial fortitude. It acts as a buffer against losses and affords protection for depositors when a bank is struggling financially. From a safety and soundness perspective, the higher the capital, the better.
Cross Keys Bank achieved a score of 16 out of a possible 30 points on our test to measure the adequacy of a bank's capital, above the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Cross Keys Bank's Tier 1 capital ratio was 15.07 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather economic headwinds.

Overall, Cross Keys Bank held equity amounting to 12.33 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 capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due loans.

A bank with large numbers of these types of assets could eventually have to use capital to cover losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a future failure.

Cross Keys Bank scored 36 out of a possible 40 points on Bankrate's test of asset quality, lower than the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 1.23 percent of Cross Keys 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 1.04 percent.

Banks keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." How large that reserve is can be a useful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Cross Keys Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, likely making the bank better able to withstand financial shocks. Banks that are losing money, however, have less ability to do those things.

Cross Keys Bank scored 16 out of a possible 30 on Bankrate's test of earnings, coming in below 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 total equity. The most recent annualized quarterly return on equity for Cross Keys Bank was 8.18 percent, below the national average of 9.28 percent.

The bank recorded net income of $1.7 million on total equity of $42.6 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.99 percent, below the 1 percent deemed satisfactory in accordance with industry standards and 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.