Safe and Sound

First National Bank of Omaha

Omaha, NE
4
Star Rating
Started in 1857, First National Bank of Omaha is an FDIC-insured bank based in Omaha, NE. The bank has equity of $1.98 billion on $19,518,079,000 in assets, according to June 30, 2017, regulatory filings.

With 4,667 full-time employees in 126 offices in multiple states, the bank holds loans and leases worth $14.08 billion, including real estate loans of $4.74 billion. U.S. bank customers currently have $16.16 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, First National Bank of Omaha exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank faired on the three key criteria Bankrate used to score U.S. banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial strength, capital is crucial. It acts as a bulwark against losses and as protection for accountholders during periods of economic trouble for the bank. From a safety and soundness perspective, more capital is better.
On our test to measure the adequacy of a bank's capital, First National Bank of Omaha received a score of 10 out of a possible 30 points, coming in below the national average of 13.38.

One important measure of this buffer is a bank's Tier 1 capital ratio. First National Bank of Omaha's Tier 1 capital ratio was 10.69 percent, above the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial difficulties.

Overall, First National Bank of Omaha held equity amounting to 10.15 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 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 lots of these types of assets may eventually have to use capital to absorb losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, decreasing earnings and increasing the risk of a future failure.

First National Bank of Omaha beat out the national average of 37.62 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.67 percent of First National Bank of Omaha'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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the how large that reserve is 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 First National Bank of Omaha's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, reduce a bank's ability to do those things.

First National Bank of Omaha scored 18 out of a possible 30 on Bankrate's test of earnings, better than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for First National Bank of Omaha was 8.71 percent, below the national average of 9.28 percent.

The bank reported net income of $85.1 million on total equity of $1.98 billion for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 0.89 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.