Safe and Sound

Lakeside State Bank

Oologah, OK
4
Star Rating
Lakeside State Bank is an FDIC-insured bank started in 1976 and currently headquartered in Oologah, OK. Regulatory filings show the bank having equity of $5.7 million on assets of $72.5 million, as of December 31, 2017.

U.S. bank customers have $59.3 million on deposit at 2 offices in OK run by 21 full-time employees. With that footprint, the bank has amassed loans and leases worth $27.9 million, including $14.5 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, Lakeside State Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three key criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for account holders during times of financial trouble for the bank. Therefore, when it comes to measuring an a bank's financial stability, capital is essential. From a safety and soundness perspective, the higher the capital, the better.

Lakeside State Bank received a score of 6 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 essential measure of this buffer is a bank's Tier 1 capital ratio. Lakeside State Bank's Tier 1 capital ratio was 17.63 percent, above the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic difficulties.

Overall, Lakeside State Bank held equity amounting to 7.82 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 mortgages, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these kinds of assets could eventually force a bank to use capital to absorb losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the risk of a failure in the future.

On Bankrate's asset quality test, Lakeside State Bank scored 40 out of a possible 40 points, exceeding the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 0.37 percent of Lakeside State Bank'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 handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Lakeside State Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, Lakeside State Bank scored 22 out of a possible 30, beating out the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Lakeside State Bank was 13.41 percent, above the national average of 8.10 percent.

The bank reported net income of $756,000 on total equity of $5.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.09 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.