Safe and Sound

The Bank and Trust, S.S.B.

Del Rio, TX
5
Star Rating
The Bank and Trust, S.S.B. is an FDIC-insured bank started in 1910 and currently headquartered in Del Rio, TX. As of December 31, 2017, the bank held equity of $40.9 million on $423.0 million in assets.

U.S. bank customers have $359.2 million on deposit at 7 offices in TX run by 122 full-time employees. With that footprint, the bank holds loans and leases worth $264.7 million, $210.0 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, The Bank and Trust, S.S.B. exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did 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

When it comes to measuring an a bank's financial resilience, capital is useful. It works as a cushion against losses and affords protection for depositors when a bank is experiencing economic instability. When looking at safety and soundness, more capital is better.

The Bank and Trust, S.S.B. received a score of 10 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 13.13.

One essential measure of this buffer is a bank's Tier 1 capital ratio. The Bank and Trust, S.S.B.'s Tier 1 capital ratio was 18.72 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to financial challenges.

Overall, The Bank and Trust, S.S.B. held equity amounting to 9.67 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

A bank with large numbers of these types of assets may eventually be required to use capital to cover losses, diminishing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, The Bank and Trust, S.S.B. scored 40 out of a possible 40 points, better than the national average of 37.49 points.

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, 0.08 percent of The Bank and Trust, S.S.B.'s loans were noncurrent -- in other words, 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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the size of that reserve to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on The Bank and Trust, S.S.B.'s loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank better able to withstand economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.

The Bank and Trust, S.S.B. scored 22 out of a possible 30 on Bankrate's test of earnings, better than 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 measure of a bank's earnings. The most recent annualized quarterly return on equity for The Bank and Trust, S.S.B. was 12.17 percent, above the national average of 8.10 percent.

The bank reported net income of $5.0 million on total equity of $40.9 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.16 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.