Safe and Sound

Integrity First Bank, National Association

Mountain Home, AR
4
Star Rating
Integrity First Bank, National Association is a Mountain Home, AR-based, FDIC-insured bank dating back to 1963. Regulatory filings show the bank having equity of $52.4 million on $483.9 million in assets, as of December 31, 2017.

U.S. bank customers have $411.0 million on deposit at 10 offices in AR run by 127 full-time employees. With that footprint, the bank currently holds loans and leases worth $337.4 million, including real estate loans of $303.2 million.

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

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial strength, capital is important. It acts as a buffer against losses and affords protection for depositors when a bank is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a bank's capital, Integrity First Bank, National Association received a score of 8 out of a possible 30 points, falling short of the national average of 13.13.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Integrity First Bank, National Association's Tier 1 capital ratio was 12.48 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather economic downturns.

Overall, Integrity First Bank, National Association held equity amounting to 10.83 percent of its assets, which was lower than 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 reserves set aside to cover loan losses, as well as overall capitalization.

A bank with lots of these types of assets could eventually be required to use capital to cover losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, decreasing earnings and increasing the chances of a failure in the future.

Integrity First Bank, National Association scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 37.49.

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, 0.07 percent of Integrity First Bank, National Association'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 . That reserve's size can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Integrity First Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, likely making the bank better prepared to withstand economic trouble. Conversely, losses lessen a bank's ability to do those things.

On Bankrate's earnings test, Integrity First Bank, National Association scored 16 out of a possible 30, above the national average of 15.12.

One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. Integrity First Bank, National Association's most recent annualized quarterly return on equity was 7.76 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $4.1 million on total equity of $52.4 million. The bank had an annualized return on average assets, or ROA, of 0.88 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.