Safe and Sound

First Westroads Bank, Inc.

Omaha, NE
5
Star Rating
Founded in 1967, First Westroads Bank, Inc. is an FDIC-insured bank based in Omaha, NE. Regulatory filings show the bank having equity of $32.4 million on $264.2 million in assets, as of December 31, 2017.

With 50 full-time employees in 2 offices in NE, the bank currently holds loans and leases worth $202.7 million, including real estate loans of $176.3 million. U.S. bank customers currently have $222.0 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, First Westroads Bank, Inc. 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 major criteria Bankrate used to grade American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for account holders when a bank is struggling financially. It follows then that when it comes to measuring an a bank's financial stability, capital is important. When looking at safety and soundness, more capital is preferred.

On our test to measure capital adequacy, First Westroads Bank, Inc. racked up 16 out of a possible 30 points, beating out the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. First Westroads Bank, Inc.'s Tier 1 capital ratio was 15.06 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 difficulties.

Overall, First Westroads Bank, Inc. held equity amounting to 12.28 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 past-due mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

A bank with large numbers of these types of assets could eventually be required to use capital to cover losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and elevating the chances of a failure in the future.

First Westroads Bank, Inc. scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 37.49.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.02 percent of First Westroads Bank, Inc.'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 to deal with problem assets known as an "allowance for loan and lease losses." Comparing how large that reserve is to the total amount of problematic loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. First Westroads Bank, Inc.'s loan loss allowance was 8,442.86 percent of its total noncurrent loans, exceeding the national average. All things being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, take away from a bank's ability to do those things.

On Bankrate's test of earnings, First Westroads Bank, Inc. scored 24 out of a possible 30, beating the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. First Westroads Bank, Inc.'s most recent annualized quarterly return on equity was 14.91 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $4.7 million on total equity of $32.4 million. The bank reported 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.