Safe and Sound

MidSouth Bank, National Association

2
Star Rating
MidSouth Bank, National Association is a Lafayette, LA-based, FDIC-insured bank dating back to 1985. The bank has equity of $225.0 million on assets of $1.88 billion, according to December 31, 2017, regulatory filings.

With 467 full-time employees in 49 offices in multiple states, the bank currently holds loans and leases worth $1.17 billion, including real estate loans of $697.7 million. U.S. bank customers currently have $1.53 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, MidSouth Bank, National Association exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank fared on the three major criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial resilience, capital is crucial. It acts as a cushion against losses and affords protection for depositors during periods of economic trouble for the bank. When looking at safety and soundness, more capital is preferred.

MidSouth Bank, National Association finished below the national average of 13.13 on our test to measure capital adequacy, racking up 10 out of a possible 30 points.

A bank's Tier 1 capital ratio is an essential measure of this buffer. MidSouth Bank, National Association's Tier 1 capital ratio was 13.00 percent, higher than the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to financial challenges.

Overall, MidSouth Bank, National Association held equity amounting to 11.97 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid mortgages.

A bank with a large number of these kinds of assets may eventually be required to use capital to absorb losses, decreasing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in depressed earnings and potentially more risk of a future failure.

MidSouth Bank, National Association finished below the national average of 37.49 on Bankrate's asset quality test, racking up 28 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 4.59 percent of MidSouth Bank, National Association's loans were noncurrent -- in other words, 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 to deal with troubled 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 problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on MidSouth Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand economic trouble. Losses, on the other hand, reduce a bank's ability to do those things.

MidSouth Bank, National Association scored 0 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) 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 MidSouth Bank, National Association was -4.82 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $-10.8 million on total equity of $225.0 million. The bank reported an annualized return on average assets, or ROA, of -0.56 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.