Safe and Sound

The National Bank of Texas at Fort Worth

Fort Worth, TX
5
Star Rating
Fort Worth, TX-based The National Bank of Texas at Fort Worth is an FDIC-insured bank started in 1973. The bank has equity of $29.3 million on $255.6 million in assets, according to December 31, 2017, regulatory filings.

U.S. bank customers have $225.7 million on deposit at 4 offices in TX run by 59 full-time employees. With that footprint, the bank has amassed loans and leases worth $158.3 million, including $116.4 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, The National Bank of Texas at Fort Worth exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank did on the three important criteria Bankrate used to score U.S. banks on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a bank's financial strength. It acts as a bulwark against losses and affords protection for accountholders during periods of financial instability for the bank. When looking at safety and soundness, the higher the capital, the better.

The National Bank of Texas at Fort Worth racked up 14 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 a widely followed measure of this buffer. The National Bank of Texas at Fort Worth's Tier 1 capital ratio was 20.41 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic headwinds.

Overall, The National Bank of Texas at Fort Worth held equity amounting to 11.47 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

Having extensive holdings of these kinds of assets suggests a bank may have to use capital to cover losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in reduced earnings and potentially more risk of a future failure.

The National Bank of Texas at Fort Worth scored 40 out of a possible 40 points on Bankrate's asset quality test, better than the national average of 37.49.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.09 percent of The National Bank of Texas at Fort Worth'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 1.01 percent.

Banks maintain a reserve to handle problem 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 problem assets, especially when compared to the total amount of problem loans. The National Bank of Texas at Fort Worth's loan loss allowance was 1,464.29 percent of its total noncurrent loans, above the national average. All else being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial shocks. However, banks that are losing money have less ability to do those things.

On Bankrate's test of earnings, The National Bank of Texas at Fort Worth scored 18 out of a possible 30, beating the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. The National Bank of Texas at Fort Worth's most recent annualized quarterly return on equity was 9.72 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $2.5 million on total equity of $29.3 million. The bank experienced an annualized return on average assets, or ROA, of 0.98 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.