Safe and Sound

First National Bank of Oklahoma

Oklahoma City, OK
5
Star Rating
Founded in 1917, First National Bank of Oklahoma is an FDIC-insured bank based in Oklahoma City, OK. As of December 31, 2017, the bank had equity of $38.2 million on assets of $446.5 million.

U.S. bank customers have $391.1 million on deposit at 4 offices in OK run by 61 full-time employees. With that footprint, the bank has amassed loans and leases worth $356.2 million, including $278.8 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, First National Bank of Oklahoma exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the bank fared 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 a bank's financial fortitude, capital is useful. It acts as a buffer against losses and provides protection for depositors when a bank is struggling financially. From a safety and soundness perspective, more capital is better.

On our test to measure capital adequacy, First National Bank of Oklahoma received a score of 8 out of a possible 30 points, coming in below the national average of 13.13.

One essential measure of this buffer is a bank's Tier 1 capital ratio. First National Bank of Oklahoma's Tier 1 capital ratio was 10.60 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic downturns.

Overall, First National Bank of Oklahoma held equity amounting to 8.55 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

Having lots of these types of assets suggests a bank could eventually have to use capital to cover losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, pushing down earnings and increasing the chances of a future failure.

First National Bank of Oklahoma exceeded the national average of 37.49 on Bankrate's asset quality test, racking up 40 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, 0.14 percent of First National Bank of Oklahoma's loans were noncurrent -- in other words, 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 troubled assets . Comparing the size of that reserve 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 of Oklahoma's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. Obviously, banks that are losing money have less ability to do those things.

First National Bank of Oklahoma scored 28 out of a possible 30 on Bankrate's earnings test, beating out the national average of 15.12.

One important measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for First National Bank of Oklahoma was 20.65 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $7.6 million on total equity of $38.2 million. The bank had an annualized return on average assets, or ROA, of 1.82 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.