Safe and Sound

NebraskaLand National Bank

North Platte, NE
4
Star Rating
NebraskaLand National Bank is a North Platte, NE-based, FDIC-insured bank dating back to 1998. As of December 31, 2017, the bank held equity of $77.2 million on assets of $698.6 million.

U.S. bank customers have $551.2 million on deposit at 7 offices in multiple states run by 100 full-time employees. With that footprint, the bank currently holds loans and leases worth $483.7 million, $327.7 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, NebraskaLand National Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three important criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial resilience, capital is essential. It works as a bulwark against losses and as protection for accountholders when a bank is experiencing economic instability. From a safety and soundness perspective, more capital is better.

On our test to measure capital adequacy, NebraskaLand National Bank achieved a score of 14 out of a possible 30 points, better than the national average of 13.13.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. NebraskaLand National Bank's Tier 1 capital ratio was 13.66 percent, above the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial challenges.

Overall, NebraskaLand National Bank held equity amounting to 11.04 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as unpaid mortgages, on the bank's reserves set aside to cover loan losses, as well as overall capitalization.

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, diminishing earnings and elevating the chances of a failure in the future.

NebraskaLand National Bank fell below the national average of 37.49 on Bankrate's asset quality test, racking up 28 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 3.96 percent of NebraskaLand National Bank's loans were noncurrent -- in other words, 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 maintain a reserve to deal with problem assets known as an "allowance for loan and lease losses." The size of that reserve can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on NebraskaLand National Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand economic trouble. Conversely, losses take away from a bank's ability to do those things.

NebraskaLand National Bank fell behind the national average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important measure of a bank's earnings. NebraskaLand National Bank's most recent annualized quarterly return on equity was 7.07 percent, below the national average of 8.10 percent.

The bank reported net income of $5.3 million on total equity of $77.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.75 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.