Safe and Sound

First City Bank of Florida

Fort Walton Beac, FL
NR
Star Rating
Started in 1948, First City Bank of Florida is an FDIC-insured bank based in Fort Walton Beac, FL. The bank holds equity of $5.0 million on $188.4 million in assets, according to December 31, 2017, regulatory filings.

U.S. bank customers have $173.0 million on deposit at 2 offices in FL run by 45 full-time employees. With that footprint, the bank currently holds loans and leases worth $115.0 million, including $106.1 million worth of real estate loans.

Overall, Bankrate did not have enough information on this institution to give it a star rating. Keep reading for an analysis of how the bank did on the three key criteria Bankrate used to score American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for account holders during times of financial trouble for the bank. Therefore, when it comes to measuring an an institution's financial fortitude, capital is valuable. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, First City Bank of Florida received a score of 0 out of a possible 30 points, coming in below the national average of 13.13.

A bank's Tier 1 capital ratio is an important measure of this buffer. First City Bank of Florida's Tier 1 capital ratio was 3.46 percent, lower than the 6 percent level considered adequate by regulators, and lower than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather financial challenges.

Overall, First City Bank of Florida held equity amounting to 2.64 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid mortgages.

Having a large number of these kinds 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 thus aren't earning interest for the bank, diminishing earnings and elevating the risk of a failure in the future.

First City Bank of Florida finished below the national average of 37.49 on Bankrate's asset quality test, racking up 0 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 10.87 percent of First City Bank of Florida's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . How large that reserve is can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on First City Bank of Florida's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance 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, potentially making the bank more resilient in tough times. Conversely, losses take away from a bank's ability to do those things.

First City Bank of Florida did below-average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. First City Bank of Florida's most recent annualized quarterly return on equity was -18.95 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $-1.1 million on total equity of $5.0 million. The bank had an annualized return on average assets, or ROA, of -0.53 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.