Safe and Sound

Gibsland Bank & Trust Company

Gibsland, LA
2
Star Rating
Gibsland Bank & Trust Company is a Gibsland, LA-based, FDIC-insured bank founded in 1948. The bank has equity of $41.4 million on assets of $428.7 million, according to December 31, 2017, regulatory filings.

With 85 full-time employees in 8 offices in LA, the bank holds loans and leases worth $297.7 million, including real estate loans of $227.5 million. U.S. bank customers currently have $371.0 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Gibsland Bank & Trust Company exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three important criteria Bankrate used to score U.S. banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial fortitude, capital is essential. It acts as a bulwark against losses and affords protection for accountholders when a bank is experiencing economic trouble. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, Gibsland Bank & Trust Company received a score of 10 out of a possible 30 points, lower than the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Gibsland Bank & Trust Company's Tier 1 capital ratio was 12.64 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic downturns.

Overall, Gibsland Bank & Trust Company held equity amounting to 9.66 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

A bank with a large number of these types of assets could eventually have 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 thus aren't earning interest for the bank, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, Gibsland Bank & Trust Company scored 12 out of a possible 40 points, less than the national average of 37.49 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 7.01 percent of Gibsland Bank & Trust Company's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the size of that reserve to the total amount of problematic loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Gibsland Bank & Trust Company's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Losses, on the other hand, diminish a bank's ability to do those things.

Gibsland Bank & Trust Company outperformed the average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.

One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for Gibsland Bank & Trust Company was 10.47 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $4.2 million on total equity of $41.4 million. The bank experienced an annualized return on average assets, or ROA, of 1.02 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 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.