First National of Nebraska ratings affirmed by Fitch with stable outlook

Traders Union
All News
Financial News
First National ratings affirmed

Highlights

Fitch affirms First National of Nebraska's and First National Bank of Omaha's long-term 'BBB' and short-term 'F2' ratings with a Stable Outlook, citing solid financial performance and credit improvement.
Consumer net charge-off rates are projected to improve to 5% in 2025 from 5.8% in 2024, driven by enhanced underwriting and stable macroeconomic conditions.
Profitability rises as operating profit over risk-weighted assets increases to 2.3% in 2025 from 2.0%, while CET1 ratio declines to 11.8% due to the CCB acquisition.

Rating rationale and financial profile

As reported by Fitch Ratings, the agency has affirmed the Long- and Short-Term Issuer Default Ratings of First National of Nebraska, Inc. and its operating subsidiary, First National Bank of Omaha, at 'BBB' and 'F2', respectively, while also affirming FNNI's Viability Rating at 'bbb'. The Outlook on the long-term ratings remains Stable.

Fitch says the affirmation reflects good financial performance, a solid deposit franchise and improving credit performance. The agency highlights FNNI's leading market share in Nebraska and its broader presence in Midwestern markets, with a granular and highly insured consumer deposit base. It also points to the bank's credit card business as a key franchise strength, particularly its niche in co-branded card partnerships.

At the same time, Fitch notes that FNNI maintains a higher risk appetite than midsize regional peers because unsecured loans make up about 40% of total loans at the end of 2025. That concentration supports strong risk-adjusted returns but keeps net charge-offs above peer levels over time, although Fitch views management's tighter underwriting and slower recent card portfolio growth as credit positives.

Credit, capital and funding implications

Credit quality improves in 2025, with consumer net charge-off rates falling to 5% from 5.8% in 2024, supported by better underwriting practices and resilient macroeconomic conditions. Fitch says credit cards remain a concentrated exposure, but it expects credit losses to stabilize near current levels or improve modestly as loan vintages strengthen.

Profitability also strengthens in 2025, with operating profit over risk-weighted assets rising to 2.3% from 2.0%, above the peer median of 1.9%. Fitch attributes that increase to net interest margin expansion, positive operating leverage and diversified fee income, and says earnings remain in the top quartile among mid-tier regional peers despite volatility over the past four years.

Capitalization weakens modestly, with the CET1 ratio declining to 11.8% in 2025 from 12.4%, mainly because of the all-cash CCB acquisition and the continuing CECL phase-in. Fitch still considers the level adequate relative to peers and expects capital ratios to stabilize, while the agency also says funding and liquidity remain rating strengths because of the bank's branch network, core deposit franchise and conservative liquidity management.

In our earlier article on Home Depot’s investment-grade credit rating being reaffirmed, we outlined how the company’s resilient operating performance helped support stable rating outlooks despite softer home improvement demand. We also noted expectations for modest revenue and EBITDA growth supported by acquisitions and new store openings, while highlighting key risks that could pressure the rating if leverage rises meaningfully.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.