Safe and Sound

First National Bank and Trust Company of Weatherford

Weatherford, TX
4
Star Rating
First National Bank and Trust Company of Weatherford is a Weatherford, TX-based, FDIC-insured bank founded in 1880. As of December 31, 2017, the bank had equity of $20.8 million on assets of $240.5 million.

U.S. bank customers have $216.7 million on deposit at 3 offices in TX run by 52 full-time employees. With that footprint, the bank has amassed loans and leases worth $202.3 million, $160.3 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, First National Bank and Trust Company of Weatherford 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 important criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial stability, capital is useful. It works as a cushion against losses and as protection for depositors when a bank is experiencing economic instability. When it comes to safety and soundness, the more capital, the better.

First National Bank and Trust Company of Weatherford fell below the national average of 13.13 on our test to measure capital adequacy, scoring 8 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. First National Bank and Trust Company of Weatherford's Tier 1 capital ratio was 10.74 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 downturns.

Overall, First National Bank and Trust Company of Weatherford held equity amounting to 8.67 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 capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

A bank with extensive holdings of these kinds of assets could eventually be required to use capital to absorb losses, diminishing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, diminishing earnings and elevating the risk of a failure in the future.

On Bankrate's test of asset quality, First National Bank and Trust Company of Weatherford scored 40 out of a possible 40 points, beating out the national average of 37.49 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, 0.29 percent of First National Bank and Trust Company of Weatherford'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 known as an "allowance for loan and lease losses" to deal with problem assets . Comparing how large that reserve is to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on First National Bank and Trust Company of Weatherford's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand economic trouble. However, banks that are losing money have less ability to do those things.

First National Bank and Trust Company of Weatherford received below-average marks on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. First National Bank and Trust Company of Weatherford's most recent annualized quarterly return on equity was 6.36 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $1.3 million on total equity of $20.8 million. The bank reported an annualized return on average assets, or ROA, of 0.55 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.