Safe and Sound

The First National Bank of Beeville

Beeville, TX
4
Star Rating
Beeville, TX-based The First National Bank of Beeville is an FDIC-insured bank founded in 1890. The bank has equity of $32.2 million on assets of $386.8 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 56 full-time employees in 3 offices in TX, the bank has amassed loans and leases worth $260.5 million, including real estate loans of $229.1 million. U.S. bank customers currently have $351.9 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The First National Bank of Beeville exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three key criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for account holders during times of financial instability for the bank. Therefore, when it comes to measuring an a bank's financial stability, capital is essential. From a safety and soundness perspective, more capital is better.

On our test to measure the adequacy of a bank's capital, The First National Bank of Beeville received a score of 8 out of a possible 30 points, less than the national average of 13.13.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. The First National Bank of Beeville's Tier 1 capital ratio was 11.51 percent, exceeding the 6 percent level regulators consider adequate, 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 headwinds.

Overall, The First National Bank of Beeville held equity amounting to 8.31 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due loans.

Having large numbers of these kinds of assets means a bank may have to use capital to absorb losses, reducing its cushion 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, decreasing earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, The First National Bank of Beeville scored 32 out of a possible 40 points, below the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of December 31, 2017, 1.76 percent of The First National Bank of Beeville's loans were noncurrent, meaning 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 deal with troubled assets known as an "allowance for loan and lease losses." Comparing how large that reserve is to the total amount of problematic loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on The First National Bank of Beeville's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, expanding its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses diminish a bank's ability to do those things.

The First National Bank of Beeville scored 20 out of a possible 30 on Bankrate's test of earnings, above the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for The First National Bank of Beeville was 11.80 percent, above the national average of 8.10 percent.

The bank reported net income of $3.7 million on total equity of $32.2 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.06 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.