Safe and Sound

First Bank and Trust Company

Minden, NE
4
Star Rating
First Bank and Trust Company is a Minden, NE-based, FDIC-insured bank that opened its doors in 1883. The bank holds equity of $6.9 million on assets of $73.1 million, according to December 31, 2017, regulatory filings.

With 15 full-time employees, the bank holds loans and leases worth $34.6 million, including real estate loans of $18.3 million. U.S. bank customers currently have $54.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, First Bank and Trust Company exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three key criteria Bankrate used to evaluate American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for account holders when a bank is struggling financially. Therefore, when it comes to measuring an a bank's financial stability, capital is key. When looking at safety and soundness, the more capital, the better.

First Bank and Trust Company received a score of 10 out of a possible 30 points on our test to measure the adequacy of a bank's capital, lower than the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. First Bank and Trust Company's Tier 1 capital ratio was 17.36 percent, exceeding 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 downturns.

Overall, First Bank and Trust Company held equity amounting to 9.44 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

Having lots of these types of assets could eventually require a bank to use capital to cover losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and elevating the risk of a future failure.

First Bank and Trust Company beat out the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 0.08 percent of First Bank and Trust Company'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 . That reserve's size can be a widely used indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of problematic loans. First Bank and Trust Company's loan loss allowance was 1,879.31 percent of its total noncurrent loans, exceeding the national average. All things being equal, a higher ratio of loan loss allowance to noncurrent loans is better.

Earnings score

A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand financial trouble. Conversely, losses diminish a bank's ability to do those things.

On Bankrate's test of earnings, First Bank and Trust Company scored 12 out of a possible 30, less than the national average of 15.12.

One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. First Bank and Trust Company's most recent annualized quarterly return on equity was 5.71 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $400,000 on total equity of $6.9 million. The bank reported an annualized return on average assets, or ROA, of 0.54 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.