KBRA Affirms Ratings for First National of Nebraska, Inc.

KBRA affirms the senior unsecured debt rating of A-, the subordinated debt rating of BBB+, and the short-term debt rating of K2 for First National of Nebraska, Inc. (OTC: FINN or “the company”), a closely-held bank holding company headquartered in Omaha, Nebraska. KBRA also affirms the deposit and senior unsecured debt ratings of A, the subordinated debt rating of A-, and the short-term deposit and debt ratings of K1 for First National Bank of Omaha, the lead subsidiary. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

The ratings are supported by FINN’s differentiated earnings profile which includes a more diverse business model generating greater revenues through both spread-based and noninterest income sources. FINN’s various fee generating business lines (credit cards, wealth/trust and investment advisory services, IT managed services, insurance, etc.) have consistently provided peer-leading noninterest income, totaling $309 million through 1H25 (~2% of average assets). This includes revenues from FINN’s sizable credit card business, with over three million active cards and $8.2 billion in outstanding balances at 2Q25. FINN’s leadership is highly experienced within the space and has demonstrated its ability to manage the risks associated with credit cards as reflected by the strong risk adjusted yields generated over a multi-year period from its credit card loans (above 11% since 2023, with historical levels generally ranging between 8% - 9%) on top of the noninterest income generated from interchange fees ($74 million in 1H25). Overall, KBRA maintains a favorable view towards FINN’s leadership and its robust risk management practices that cover its diverse set of business lines.

FINN maintains a durable, primarily core deposit funding base, supported by a broad retail branch network, complemented by its small business and commercial banking segments. Altogether, the company’s funding costs have tracked in line with rated peers (2.20% for 2Q25), further augmenting its NIM (6.53% at 2Q25), which greatly benefits from its higher yielding credit card portfolio (total loan portfolio yield was 10.23% at 2Q25). The company’s higher credit loss content (NCO ratio of 2.5% through 1H25) is largely reflective of its concentration in credit cards and consumer loans. FINN has demonstrated its ability to sufficiently price and manage this risk, with strong earnings (RoRWA of 1.45% through 1H25) and robust reserve levels (+4% of total loans).

FINN completed its acquisition of Country Club Bank on October 1, 2025. While relatively small ($2.2 billion in assets at 2Q25), Country Club Bank provides the company a meaningful presence in the Kansas City MSA, a targeted market for FINN, as well as is additive to its expansive fee generating business lines, namely its wealth and trust business, with $3 billion in AUM acquired in the transaction. The all-cash transaction had a material impact on capital (proforma CET1 ratio of 11.3%), though KBRA expects the company to sufficiently rebuild its capital levels closer to its historical norms in the near term. FINN has historically maintained suitable capital levels, with more recent trends reflective of the company’s targeted rebuild of capital following acquisitions completed in 2022 and 2023, increasing its CET1 ratio roughly 200 bps since YE23 to 12.9% at 2Q25.

Rating Sensitivities

The Stable Outlook reflects KBRA's view that a rating change is not likely over the medium term. However, should FINN experience a material shift in credit quality, including risk-adjusted yields within the credit card portfolio falling measurably below historical norms, impacting the profitability of the company, or should FINN become more aggressive with regard to its capital management strategy, with capital ratios consistently tracking below peer levels, negative rating action could ensue.

To access ratings and relevant documents, click here.

Methodologies