Additional Factors: Institutions with a small asset base or a short operating history can represent an instability risk beyond what their financial ratios indicate. The First National Bank of Kemp has a relatively low asset base.
The Texas Ratio is an indicator of how much capital a bank has available compared to the total value of loans considered at risk. As of March 31, 2014 The First National Bank of Kemp had $2.02 million in non-current loans and owned real-estate with $6.53 million in equity and loan loss allowances on hand to cover it. This gives The First National Bank of Kemp a Texas Ratio of 31.01% which is average. Any bank with a Texas Ratio near or greater than 100% is considered at risk.
The Texas Ratio for The First National Bank of Kemp increased slightly from 21.03% as of March 31, 2013 to 31.01% as of March 31, 2014, resulting in a negative change of 47.47%. This indicates that the balance sheet and financial strength for The First National Bank of Kemp has declined slightly in recent periods.
In the past year, The First National Bank of Kemp has decreased its total deposits by -$1.3 million, resulting in -2.64% growth for the year. A strong track record of growth is an indicator of consumer confidence and the bank's ability to strengthen its balance sheet. The growth The First National Bank of Kemp has shown is below average.
Both FDIC and NCUA consider capitalization levels of banks and credit unions to be of high importance. Higher capitalization allows for a greater buffer when cover loans that may fail in the future. The First National Bank of Kemp has $54.42 million in assets with $6.53 million in equity, resulting in a capitalization level of 11.99%, which is excellent.