Safe and Sound

The First National Bank in Cooper

Cooper, TX
4
Star Rating
The First National Bank in Cooper is a Cooper, TX-based, FDIC-insured bank founded in 1891. As of December 31, 2017, the bank had equity of $6.2 million on assets of $46.3 million.

Thanks to the work of 10 full-time employees, the bank has amassed loans and leases worth $20.7 million, including real estate loans of $13.7 million. The bank currently holds $40.0 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, The First National Bank in Cooper 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 key criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for account holders when a bank is experiencing economic instability. It follows then that a bank's level of capital is a useful measurement of an institution's financial strength. From a safety and soundness perspective, the more capital, the better.

The First National Bank in Cooper racked up 18 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 13.13.

A bank's Tier 1 capital ratio is an important measure of this buffer. The First National Bank in Cooper's Tier 1 capital ratio was 41.77 percent, exceeding the 6 percent level regulators consider adequate, and higher than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, The First National Bank in Cooper held equity amounting to 13.38 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 mortgages, on the bank's capitalization and allocated loan loss reserves.

Having extensive holdings of these types of assets may eventually force a bank to use capital to cover 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, pushing down earnings and increasing the chances of a failure in the future.

The First National Bank in Cooper scored 36 out of a possible 40 points on Bankrate's asset quality test, less than the national average of 37.49.

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, 2.54 percent of The First National Bank in Cooper'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 keep a reserve to handle troubled assets known as an "allowance for loan and lease losses." That reserve's size can be a useful 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 The First National Bank in Cooper's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.

The First National Bank in Cooper did below-average on Bankrate's test of earnings, 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 widely used measure of a bank's earnings. The First National Bank in Cooper's most recent annualized quarterly return on equity was 6.13 percent, below the national average of 8.10 percent.

The bank earned net income of $379,000 on total equity of $6.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.78 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.