Safe and Sound

Gulf Coast Bank and Trust Company

New Orleans, LA
4
Star Rating
Founded in 1990, Gulf Coast Bank and Trust Company is an FDIC-insured bank headquartered in New Orleans, LA. Regulatory filings show the bank having equity of $138.4 million on assets of $1.61 billion, as of December 31, 2017.

Thanks to the efforts of 547 full-time employees in 32 offices in multiple states, the bank holds loans and leases worth $1.32 billion, including real estate loans of $919.8 million. The bank currently holds $1.41 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Gulf Coast Bank and Trust Company exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three key criteria Bankrate used to evaluate American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial strength, capital is useful. It acts as a bulwark against losses and provides protection for depositors when a bank is experiencing financial trouble. When it comes to safety and soundness, the more capital, the better.

Gulf Coast Bank and Trust Company received a score of 8 out of a possible 30 points on our test to measure the adequacy of a bank's capital, lower than the national average of 13.13.

One important measure of this buffer is a bank's Tier 1 capital ratio. Gulf Coast Bank and Trust Company's Tier 1 capital ratio was 10.30 percent, exceeding the 6 percent level considered adequate by regulators, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic challenges.

Overall, Gulf Coast Bank and Trust Company held equity amounting to 8.58 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid loans.

A bank with extensive holdings of these types of assets could eventually have to use capital to absorb losses, shrinking its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and elevating the risk of a future failure.

Gulf Coast Bank and Trust Company scored 32 out of a possible 40 points on Bankrate's asset quality test, coming in below the national average of 37.49.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.92 percent of Gulf Coast 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 above the national average of 1.01 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 helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. 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

How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. However, banks that are losing money have less ability to do those things.

Gulf Coast Bank and Trust Company beat the national average on Bankrate's test of earnings, achieving a score of 28 out of a possible 30.

One important way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for Gulf Coast Bank and Trust Company was 20.50 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $27.6 million on total equity of $138.4 million. The bank reported an annualized return on average assets, or ROA, of 1.73 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.