Safe and Sound

Gulf Coast Bank and Trust Company

New Orleans, LA
4
Star Rating
Gulf Coast Bank and Trust Company is a New Orleans, LA-based, FDIC-insured bank dating back to 1990. Regulatory filings show the bank having equity of $135.8 million on assets of $1.66 billion, as of June 30, 2017.

Thanks to the work of 537 full-time employees in 31 offices in multiple states, the bank holds loans and leases worth $1.29 billion, including real estate loans of $885.0 million. The bank currently holds $1.48 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Gulf Coast Bank and Trust Company exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank faired on the three important criteria Bankrate used to grade American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for accountholders when a bank is struggling financially. Therefore, a bank's level of capital is a key measurement of a bank's financial strength. From a safety and soundness perspective, more capital is better.
Gulf Coast Bank and Trust Company received a score of 6 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 13.38.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Gulf Coast Bank and Trust Company's Tier 1 capital ratio was 10.04 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial difficulties.

Overall, Gulf Coast Bank and Trust Company held equity amounting to 8.18 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

A bank with lots of these types of assets could eventually be required to use capital to absorb losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, Gulf Coast Bank and Trust Company scored 32 out of a possible 40 points, less than the national average of 37.62 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, 1.99 percent of Gulf Coast Bank and Trust Company'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 known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the that reserve's size to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Gulf Coast Bank and Trust Company's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money have less ability to do those things.

On Bankrate's earnings test, Gulf Coast Bank and Trust Company scored 30 out of a possible 30, better than the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. Gulf Coast Bank and Trust Company's most recent annualized quarterly return on equity was 24.04 percent, above the national average of 9.28 percent.

The bank reported net income of $15.9 million on total equity of $135.8 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 2.00 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.