Safe and Sound

The Eastman National Bank of Newkirk

Newkirk, OK
4
Star Rating
The Eastman National Bank of Newkirk is an FDIC-insured bank founded in 1893 and currently based in Newkirk, OK. Regulatory filings show the bank having equity of $26.4 million on assets of $258.1 million, as of June 30, 2017.

With 61 full-time employees in 4 offices in OK, the bank holds loans and leases worth $181.1 million, including real estate loans of $126.0 million. U.S. bank customers currently have $221.1 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, The Eastman National Bank of Newkirk 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 key criteria Bankrate used to score U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for accountholders when a bank is experiencing economic trouble. It follows then that a bank's level of capital is a valuable measurement of a bank's financial strength. When it comes to safety and soundness, the more capital, the better.
On our test to measure capital adequacy, The Eastman National Bank of Newkirk received a score of 12 out of a possible 30 points, less than the national average of 13.38.

A bank's Tier 1 capital ratio is an essential measure of this buffer. The Eastman National Bank of Newkirk's Tier 1 capital ratio was 14.17 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to financial difficulties.

Overall, The Eastman National Bank of Newkirk held equity amounting to 10.23 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid mortgages, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these kinds of assets means a bank may eventually have to use capital to absorb losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, reducing earnings and elevating the chances of a failure in the future.

The Eastman National Bank of Newkirk scored above the national average of 37.62 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 0.83 percent of The Eastman National Bank of Newkirk'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 1.04 percent.

Banks maintain a reserve to handle problem assets known as an "allowance for loan and lease losses." Comparing the that reserve's size to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on The Eastman National Bank of Newkirk's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand economic trouble. Losses, on the other hand, lessen a bank's ability to do those things.

On Bankrate's test of earnings, The Eastman National Bank of Newkirk scored 24 out of a possible 30, better than the national average of 16.52.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for The Eastman National Bank of Newkirk was 14.94 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $1.9 million on total equity of $26.4 million. The bank experienced an annualized return on average assets, or ROA, of 1.49 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 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.