Safe and Sound

International Bank of Commerce

Oklahoma City, OK
4
Star Rating
International Bank of Commerce is an Oklahoma City, OK-based, FDIC-insured bank founded in 2017. As of December 31, 2017, the bank had equity of $203.9 million on $1.54 billion in assets.

With 479 full-time employees in 51 offices in multiple states, the bank currently holds loans and leases worth $797.1 million, including real estate loans of $506.9 million. U.S. bank customers currently have $1.08 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, International Bank of Commerce exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three key criteria Bankrate used to grade American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for depositors during periods of economic trouble for the bank. Therefore, a bank's level of capital is a crucial measurement of an institution's financial strength. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, International Bank of Commerce received a score of 12 out of a possible 30 points, less than the national average of 13.13.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. International Bank of Commerce's Tier 1 capital ratio was 13.41 percent, higher than the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic challenges.

Overall, International Bank of Commerce held equity amounting to 13.26 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

A bank with large numbers of these kinds of assets may eventually be required to use capital to absorb losses, reducing its buffer of equity. 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 reduced earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, International Bank of Commerce scored 40 out of a possible 40 points, beating the national average of 37.49 points.

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, 0.08 percent of International Bank of Commerce'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 at-risk loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. International Bank of Commerce's loan loss allowance was 1,281.06 percent of its total noncurrent loans, higher than the national average. All else being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.

On Bankrate's earnings test, International Bank of Commerce scored 16 out of a possible 30, beating out the national average of 15.12.

One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The most recent annualized quarterly return on equity for International Bank of Commerce was 7.90 percent, below the national average of 8.10 percent.

The bank earned net income of $15.7 million on total equity of $203.9 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.02 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.