Safe and Sound

First Bank & Trust East Texas

Diboll, TX
4
Star Rating
First Bank & Trust East Texas is a Diboll, TX-based, FDIC-insured bank started in 1953. Regulatory filings show the bank having equity of $102.1 million on $993,203,000 in assets, as of June 30, 2017.

Thanks to the work of 277 full-time employees in 17 offices in TX, the bank currently holds loans and leases worth $653.4 million, $511.5 million of which are for real estate. U.S. bank customers currently have $888.0 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, First Bank & Trust East Texas exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank faired on the three important criteria Bankrate used to score American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial resilience, capital is essential. It works as a buffer against losses and affords protection for depositors when a bank is struggling financially. From a safety and soundness perspective, more capital is preferred.
First Bank & Trust East Texas received a score of 10 out of a possible 30 points on our test to measure capital adequacy, below the national average of 13.38.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. First Bank & Trust East Texas's Tier 1 capital ratio was 13.22 percent, exceeding the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial challenges.

Overall, First Bank & Trust East Texas held equity amounting to 10.28 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

A bank with extensive holdings of these types of assets could eventually be forced to use capital to absorb losses, decreasing 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 interest for the bank, diminishing earnings and elevating the chances of a failure in the future.

First Bank & Trust East Texas exceeded the national average of 37.62 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 useful indicator of asset quality.As of June 30, 2017, 0.56 percent of First Bank & Trust East Texas'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 known as an "allowance for loan and lease losses" to deal with problem 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 Bank & Trust East Texas's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand financial trouble. Losses, on the other hand, reduce a bank's ability to do those things.

First Bank & Trust East Texas scored 20 out of a possible 30 on Bankrate's earnings test, beating out the national average of 16.52.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. First Bank & Trust East Texas's most recent annualized quarterly return on equity was 11.13 percent, above the national average of 9.28 percent.

The bank recorded net income of $5.6 million on total equity of $102.1 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.12 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but 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.