Safe and Sound

First National Bank in Okeene

Okeene, OK
5
Star Rating
First National Bank in Okeene is an Okeene, OK-based, FDIC-insured bank that opened its doors in 1916. As of December 31, 2017, the bank had equity of $12.6 million on assets of $73.6 million.

Thanks to the efforts of 9 full-time employees, the bank holds loans and leases worth $55.8 million, $27.4 million of which are for real estate. The bank currently holds $61.0 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, First National Bank in Okeene exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three key criteria Bankrate used to score American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for account holders during periods of economic trouble for the bank. Therefore, when it comes to measuring an a bank's financial resilience, capital is useful. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, First National Bank in Okeene racked up 26 out of a possible 30 points, above the national average of 13.13.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. First National Bank in Okeene's Tier 1 capital ratio was 21.32 percent, higher than the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic headwinds.

Overall, First National Bank in Okeene held equity amounting to 17.16 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as unpaid mortgages.

Having lots of these kinds of assets means a bank may eventually have to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in lower earnings and potentially more risk of a future failure.

First National Bank in Okeene scored 36 out of a possible 40 points on Bankrate's asset quality test, coming in below the national average of 37.49.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 2.50 percent of First National Bank in Okeene's loans were noncurrent, meaning 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 to handle problem assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of problematic loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on First National Bank in Okeene'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, increasing its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand financial trouble. Losses, on the other hand, diminish a bank's ability to do those things.

On Bankrate's test of earnings, First National Bank in Okeene scored 22 out of a possible 30, beating out the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. First National Bank in Okeene's most recent annualized quarterly return on equity was 13.16 percent, above the national average of 8.10 percent.

The bank recorded net income of $1.7 million on total equity of $12.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 2.28 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.