Safe and Sound

First National Banker's Bank

Baton Rouge, LA
4
Star Rating
Founded in 1984, First National Banker's Bank is an FDIC-insured bank headquartered in Baton Rouge, LA. Regulatory filings show the bank having equity of $144.4 million on $869.1 million in assets, as of December 31, 2017.

Thanks to the efforts of 177 full-time employees in 5 offices in multiple states, the bank currently holds loans and leases worth $604.8 million, including real estate loans of $430.2 million. U.S. bank customers currently have $404.5 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, First National Banker's Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to grade U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for depositors during times of financial trouble for the bank. It follows then that when it comes to measuring an an institution's financial resilience, capital is essential. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, First National Banker's Bank scored 24 out of a possible 30 points, above the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. First National Banker's Bank's Tier 1 capital ratio was 17.86 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial downturns.

Overall, First National Banker's Bank held equity amounting to 16.61 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

Having large numbers of these kinds of assets may eventually require a bank to use capital to cover losses, reducing 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, resulting in lower earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, First National Banker's Bank scored 36 out of a possible 40 points, failing to reach the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 1.82 percent of First National Banker's Bank'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 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 at-risk loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on First National Banker's Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money are less able to do those things.

First National Banker's Bank fell behind the national average on Bankrate's test of earnings, achieving a score of 0 out of a possible 30.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. First National Banker's Bank's most recent annualized quarterly return on equity was -2.16 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $-3.2 million on total equity of $144.4 million. The bank experienced an annualized return on average assets, or ROA, of -0.36 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.