Safe and Sound

First Bank and Trust Company of Illinois

Palatine, IL
1
Star Rating
First Bank and Trust Company of Illinois is a Palatine, IL-based, FDIC-insured bank dating back to 1962. As of December 31, 2017, the bank held equity of $24.1 million on $191.5 million in assets.

Thanks to the efforts of 28 full-time employees, the bank currently holds loans and leases worth $116.3 million, $91.1 million of which are for real estate. The bank currently holds $166.8 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, First Bank and Trust Company of Illinois exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three major criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial fortitude, capital is essential. It works as a bulwark against losses and affords protection for depositors when a bank is experiencing financial instability. From a safety and soundness perspective, the higher the capital, the better.

First Bank and Trust Company of Illinois exceeded the national average of 13.13 points on our test to measure the adequacy of a bank's capital, racking up 16 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. First Bank and Trust Company of Illinois's Tier 1 capital ratio was 16.55 percent, exceeding the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial downturns.

Overall, First Bank and Trust Company of Illinois held equity amounting to 12.58 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as unpaid loans.

Having lots of these kinds of assets means a bank could eventually have to use capital to absorb losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, decreasing earnings and increasing the risk of a failure in the future.

First Bank and Trust Company of Illinois fell below the national average of 37.49 on Bankrate's test of asset quality, racking up 0 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 December 31, 2017, none of First Bank and Trust Company of Illinois'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 maintain a reserve to deal with troubled assets known as an "allowance for loan and lease losses." The size of that reserve can be a helpful 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 Bank and Trust Company of Illinois's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Conversely, losses diminish a bank's ability to do those things.

First Bank and Trust Company of Illinois scored 4 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 15.12.

One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for First Bank and Trust Company of Illinois was 1.30 percent, below the national average of 8.10 percent.

The bank earned net income of $313,000 on total equity of $24.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.16 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below 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.