Safe and Sound

First International Bank & Trust

Watford City, ND
4
Star Rating
First International Bank & Trust is a Watford City, ND-based, FDIC-insured bank dating back to 1910. As of December 31, 2017, the bank had equity of $221.0 million on assets of $2.46 billion.

With 539 full-time employees in 27 offices in multiple states, the bank holds loans and leases worth $1.79 billion, including real estate loans of $1.22 billion. U.S. bank customers currently have $2.20 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, First International Bank & Trust exhibited a good condition, earning 4 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 score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for depositors during times of financial instability for the bank. It follows then that a bank's level of capital is an important measurement of a bank's financial fortitude. When looking at safety and soundness, the more capital, the better.

First International Bank & Trust scored below the national average of 13.13 on our test to measure capital adequacy, racking up 8 out of a possible 30 points.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. First International Bank & Trust's Tier 1 capital ratio was 11.42 percent, higher than the 6 percent level considered adequate by regulators, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, First International Bank & Trust held equity amounting to 8.97 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid loans, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these types of assets suggests a bank may have to use capital to cover losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

First International Bank & Trust fell below the national average of 37.49 on Bankrate's test of asset quality, racking up 36 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, 0.62 percent of First International Bank & Trust'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 1.01 percent.

Banks maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of at-risk loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on First International Bank & Trust's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand economic shocks. However, banks that are losing money have less ability to do those things.

First International Bank & Trust scored 24 out of a possible 30 on Bankrate's test of earnings, better than the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for First International Bank & Trust was 16.14 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $34.3 million on total equity of $221.0 million. The bank experienced an annualized return on average assets, or ROA, of 1.44 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.