Safe and Sound

St. Martin Bank and Trust Company

St. Martinville, LA
4
Star Rating
Founded in 1933, St. Martin Bank and Trust Company is an FDIC-insured bank based in St. Martinville, LA. Regulatory filings show the bank having equity of $59.9 million on assets of $596.4 million, as of June 30, 2017.

With 148 full-time employees in 12 offices in LA, the bank currently holds loans and leases worth $449.4 million, including real estate loans of $367.5 million. U.S. bank customers currently have $509.8 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, St. Martin Bank and Trust Company exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank faired on the three major criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for depositors during periods of financial trouble for the bank. Therefore, a bank's level of capital is a crucial measurement of an institution's financial fortitude. From a safety and soundness perspective, the more capital, the better.
St. Martin Bank and Trust Company received a score of 10 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 13.38.

One essential measure of this buffer is a bank's Tier 1 capital ratio. St. Martin Bank and Trust Company's Tier 1 capital ratio was 10.94 percent, higher than the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to economic headwinds.

Overall, St. Martin Bank and Trust Company held equity amounting to 10.04 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as past-due loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with a large number of these types of assets may eventually be forced to use capital to absorb losses, decreasing its equity buffer. 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 failure in the future.

St. Martin Bank and Trust Company came in below the national average of 37.62 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 1.01 percent of St. Martin 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 below the national average of 1.04 percent.

Banks keep a reserve to deal with problem assets known as an "allowance for loan and lease losses." Comparing the 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 St. Martin Bank and 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, giving a boost to its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand financial trouble. Obviously, banks that are losing money are less able to do those things.

St. Martin Bank and Trust Company scored 30 out of a possible 30 on Bankrate's earnings test, better than the national average of 16.52.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. St. Martin Bank and Trust Company's most recent annualized quarterly return on equity was 22.09 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $6.4 million on total equity of $59.9 million. The bank reported an annualized return on average assets, or ROA, of 2.16 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 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.