Safe and Sound

The First National Bank and Trust Company of Okmulgee

Okmulgee, OK
5
Star Rating
Okmulgee, OK-based The First National Bank and Trust Company of Okmulgee is an FDIC-insured bank started in 1917. The bank holds equity of $31.6 million on $261.8 million in assets, according to December 31, 2017, regulatory filings.

With 72 full-time employees in 4 offices in OK, the bank currently holds loans and leases worth $134.8 million, including real estate loans of $98.3 million. U.S. bank customers currently have $227.3 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The First National Bank and Trust Company of Okmulgee exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three important criteria Bankrate used to evaluate American 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 account holders when a bank is struggling financially. It follows then that a bank's level of capital is an essential measurement of an institution's financial resilience. From a safety and soundness perspective, more capital is preferred.

The First National Bank and Trust Company of Okmulgee racked up 14 out of a possible 30 points on our test to measure capital adequacy, better than the national average of 13.13.

One essential measure of this buffer is a bank's Tier 1 capital ratio. The First National Bank and Trust Company of Okmulgee's Tier 1 capital ratio was 15.64 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial difficulties.

Overall, The First National Bank and Trust Company of Okmulgee held equity amounting to 12.09 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as past-due loans, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these types of assets may eventually require a bank to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and increasing the risk of a future failure.

The First National Bank and Trust Company of Okmulgee scored below the national average of 37.49 on Bankrate's test of asset quality, racking up 36 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 December 31, 2017, 3.18 percent of The First National Bank and Trust Company of Okmulgee'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 handle troubled assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of problematic loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on The First National Bank and Trust Company of Okmulgee'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, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. Losses, on the other hand, reduce a bank's ability to do those things.

On Bankrate's test of earnings, The First National Bank and Trust Company of Okmulgee scored 20 out of a possible 30, beating the national average of 15.12.

Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one widely used measure of a bank's earnings. The First National Bank and Trust Company of Okmulgee's most recent annualized quarterly return on equity was 10.23 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $3.3 million on total equity of $31.6 million. The bank had an annualized return on average assets, or ROA, of 1.29 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.