Safe and Sound

First Financial Bank, National Association

Abilene, TX
5
Star Rating
First Financial Bank, National Association is an Abilene, TX-based, FDIC-insured bank started in 1889. The bank holds equity of $775.8 million on $6,921,867,000 in assets, according to June 30, 2017, regulatory filings.

With 1,172 full-time employees in 73 offices in TX, the bank has amassed loans and leases worth $3.41 billion, including real estate loans of $2.29 billion. U.S. bank customers currently have $5.73 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, First Financial Bank, National Association 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 key criteria Bankrate used to evaluate U.S. banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial fortitude, capital is valuable. It works as a buffer against losses and as protection for depositors when a bank is struggling financially. From a safety and soundness perspective, more capital is preferred.
First Financial Bank, National Association received a score of 10 out of a possible 30 points on our test to measure capital adequacy, coming in below the national average of 13.38.

A bank's Tier 1 capital ratio is an important measure of this buffer. First Financial Bank, National Association's Tier 1 capital ratio was 15.12 percent, exceeding the 6 percent level considered adequate by regulators, but below the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather financial headwinds.

Overall, First Financial Bank, National Association held equity amounting to 11.21 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with lots of these types of assets could eventually have to use capital to cover losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

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

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 0.63 percent of First Financial 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 below the national average of 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . The size of that reserve can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on First Financial Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses lessen a bank's ability to do those things.

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

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. First Financial Bank, National Association's most recent annualized quarterly return on equity was 13.79 percent, above the national average of 9.28 percent.

The bank recorded net income of $52.1 million on total equity of $775.8 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.52 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.