Safe and Sound

The First National Bank and Trust Co., Chickasha, Oklahoma

Chickasha, OK
5
Star Rating
Founded in 1892, The First National Bank and Trust Co., Chickasha, Oklahoma is an FDIC-insured bank based in Chickasha, OK. The bank has equity of $73.3 million on $581.2 million in assets, according to December 31, 2017, regulatory filings.

With 158 full-time employees in 11 offices in OK, the bank holds loans and leases worth $335.1 million, including real estate loans of $193.1 million. U.S. bank customers currently have $491.5 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The First National Bank and Trust Co., Chickasha, Oklahoma exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a bank's financial resilience. It works as a cushion against losses and as protection for depositors when a bank is experiencing financial trouble. From a safety and soundness perspective, the more capital, the better.

The First National Bank and Trust Co., Chickasha, Oklahoma did better than the national average of 13.13 points on our test to measure the adequacy of a bank's capital, racking up 14 out of a possible 30 points.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. The First National Bank and Trust Co., Chickasha, Oklahoma's Tier 1 capital ratio was 16.64 percent, exceeding the 6 percent level regulators consider adequate, but less than 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, The First National Bank and Trust Co., Chickasha, Oklahoma held equity amounting to 12.62 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's reserves set aside to cover loan losses, as well as overall capitalization, could be affected by problem assets, such as past-due mortgages.

A bank with a large number of these types of assets could eventually be required to use capital to cover losses, shrinking its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, resulting in lower earnings and potentially more risk of a failure in the future.

The First National Bank and Trust Co., Chickasha, Oklahoma scored 36 out of a possible 40 points on Bankrate's asset quality test, lower than the national average of 37.49.

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 2.66 percent of The First National Bank and Trust Co., Chickasha, Oklahoma'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 known as an "allowance for loan and lease losses" to deal with problem assets . The size of that reserve can be a helpful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on The First National Bank and Trust Co., Chickasha, Oklahoma's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Conversely, losses diminish a bank's ability to do those things.

The First National Bank and Trust Co., Chickasha, Oklahoma scored 20 out of a possible 30 on Bankrate's earnings test, beating the national average of 15.12.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The First National Bank and Trust Co., Chickasha, Oklahoma's most recent annualized quarterly return on equity was 12.09 percent, above the national average of 8.10 percent.

The bank earned net income of $8.5 million on total equity of $73.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.54 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.