Safe and Sound

Bank First National

Manitowoc, WI
5
Star Rating
Founded in 1894, Bank First National is an FDIC-insured bank headquartered in Manitowoc, WI. Regulatory filings show the bank having equity of $129.9 million on assets of $1.31 billion, as of June 30, 2017.

U.S. bank customers have $1.15 billion on deposit at 12 offices in WI run by 178 full-time employees. With that footprint, the bank holds loans and leases worth $1.07 billion, $817.7 million of which are for real estate.

Overall, Bankrate believes that, as of June 30, 2017, Bank First National exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank did on the three major criteria Bankrate used to score U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for accountholders when a bank is experiencing financial instability. Therefore, a bank's level of capital is a useful measurement of a bank's financial fortitude. From a safety and soundness perspective, more capital is preferred.
Bank First National scored below the national average of 13.38 on our test to measure the adequacy of a bank's capital, achieving a score of 10 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Bank First National's Tier 1 capital ratio was 10.14 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to financial difficulties.

Overall, Bank First National held equity amounting to 9.95 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 impact of troubled assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with large numbers of these kinds of assets may eventually be forced to use capital to absorb losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, reducing earnings and increasing the chances of a failure in the future.

Bank First National scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 37.62.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.10 percent of Bank First National'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 maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." That reserve's size 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. Bank First National's loan loss allowance was 1,010.41 percent of its total noncurrent loans, above the national average. All things being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing 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.

Bank First National scored 22 out of a possible 30 on Bankrate's earnings test, beating out the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important measure of a bank's earnings. Bank First National's most recent annualized quarterly return on equity was 13.18 percent, above the national average of 9.28 percent.

The bank recorded net income of $8.4 million on total equity of $129.9 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.29 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.