Safe and Sound

Sabine State Bank and Trust Company

Many, LA
5
Star Rating
Sabine State Bank and Trust Company is an FDIC-insured bank started in 1902 and currently headquartered in Many, LA. The bank holds equity of $86.1 million on assets of $857.0 million, according to June 30, 2017, regulatory filings.

With 383 full-time employees in 52 offices in multiple states, the bank holds loans and leases worth $672.2 million, including real estate loans of $495.1 million. U.S. bank customers currently have $746.9 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Sabine State Bank and Trust Company exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three important criteria Bankrate used to score 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 strength, capital is important. It works as a cushion 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.
Sabine State Bank and Trust Company scored below the national average of 13.38 on our test to measure the adequacy of a bank's capital, racking up 10 out of a possible 30 points.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Sabine State Bank and Trust Company's Tier 1 capital ratio was 10.85 percent, higher than the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to economic difficulties.

Overall, Sabine State Bank and Trust Company held equity amounting to 10.04 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 impact of troubled assets, such as unpaid mortgages, on the bank's capitalization and allocated loan loss reserves.

Having lots of these types of assets may eventually force a bank to use capital to cover losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, diminishing earnings and increasing the risk of a failure in the future.

On Bankrate's test of asset quality, Sabine State Bank and Trust Company scored 40 out of a possible 40 points, above 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, 0.23 percent of Sabine State Bank and Trust Company's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks maintain a reserve to handle problem 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 at-risk loans. Unfortunately, the FDIC did not provide information on Sabine State Bank and Trust Company's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the bank better able to withstand economic trouble. Obviously, banks that are losing money have less ability to do those things.

Sabine State Bank and Trust Company exceeded the national average on Bankrate's test of earnings, achieving a score of 24 out of a possible 30.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Sabine State Bank and Trust Company's most recent annualized quarterly return on equity was 15.66 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $6.6 million on total equity of $86.1 million. The bank experienced an annualized return on average assets, or ROA, of 1.53 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.