Safe and Sound

Guaranty Bank & Trust Company of Delhi, Louisiana

Delhi, LA
5
Star Rating
Delhi, LA-based Guaranty Bank & Trust Company of Delhi, Louisiana is an FDIC-insured bank founded in 1966. Regulatory filings show the bank having equity of $19.3 million on $229.9 million in assets, as of December 31, 2017.

Thanks to the work of 74 full-time employees in 9 offices in LA, the bank has amassed loans and leases worth $178.7 million, $157.6 million of which are for real estate. The bank currently holds $183.2 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Guaranty Bank & Trust Company of Delhi, Louisiana exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank fared on the three major criteria Bankrate used to evaluate American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for depositors when a bank is experiencing financial instability. Therefore, a bank's level of capital is an essential measurement of an institution's financial strength. From a safety and soundness perspective, the higher the capital, the better.

Guaranty Bank & Trust Company of Delhi, Louisiana received a score of 8 out of a possible 30 points on our test to measure the adequacy of a bank's capital, below the national average of 13.13.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. Guaranty Bank & Trust Company of Delhi, Louisiana's Tier 1 capital ratio was 12.41 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial difficulties.

Overall, Guaranty Bank & Trust Company of Delhi, Louisiana held equity amounting to 8.39 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

Having a large number of these kinds of assets means a bank could eventually have to use capital to cover losses, shrinking 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 depressed earnings and potentially more risk of a future failure.

Guaranty Bank & Trust Company of Delhi, Louisiana scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 0.18 percent of Guaranty Bank & Trust Company of Delhi, Louisiana'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 1.01 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve 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 Guaranty Bank & Trust Company of Delhi, Louisiana's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, likely making the bank better able to withstand financial trouble. However, banks that are losing money have less ability to do those things.

Guaranty Bank & Trust Company of Delhi, Louisiana received above-average marks on Bankrate's earnings test, achieving a score of 30 out of a possible 30.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. Guaranty Bank & Trust Company of Delhi, Louisiana's most recent annualized quarterly return on equity was 26.76 percent, above the national average of 8.10 percent.

The bank earned net income of $5.1 million on total equity of $19.3 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 2.28 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.