Safe and Sound

FNBC Bank & Trust

La Grange, IL
4
Star Rating
La Grange, IL-based FNBC Bank & Trust is an FDIC-insured bank founded in 1908. Regulatory filings show the bank having equity of $52.0 million on $541,342,000 in assets, as of June 30, 2017.

U.S. bank customers have $487.2 million on deposit at 6 offices in IL run by 105 full-time employees. With that footprint, the bank has amassed loans and leases worth $293.7 million, including real estate loans of $283.3 million.

Overall, Bankrate believes that, as of June 30, 2017, FNBC Bank & Trust exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three major criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a bank's financial strength. It works as a bulwark against losses and affords protection for accountholders during periods of financial instability for the bank. When it comes to safety and soundness, more capital is preferred.
On our test to measure the adequacy of a bank's capital, FNBC Bank & Trust received a score of 10 out of a possible 30 points, coming in below the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. FNBC Bank & Trust's Tier 1 capital ratio was 16.28 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather economic downturns.

Overall, FNBC Bank & Trust held equity amounting to 9.60 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to try to understand 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 suggests a bank could eventually have to use capital to absorb losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and increasing the risk of a future failure.

FNBC Bank & Trust fell below the national average of 37.62 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 1.14 percent of FNBC Bank & Trust'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 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the the size of that reserve to the total amount of at-risk loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on FNBC Bank & Trust's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses take away from a bank's ability to do those things.

FNBC Bank & Trust exceeded the national average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.

One important way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. FNBC Bank & Trust's most recent annualized quarterly return on equity was 11.33 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $2.9 million on total equity of $52.0 million. The bank reported an annualized return on average assets, or ROA, of 1.09 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 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.