Safe and Sound

F&M Bank and Trust Company

Hannibal, MO
2
Star Rating
Founded in 1886, F&M Bank and Trust Company is an FDIC-insured bank headquartered in Hannibal, MO. As of December 31, 2017, the bank had equity of $12.0 million on $125.1 million in assets.

U.S. bank customers have $102.8 million on deposit at 3 offices in MO run by 34 full-time employees. With that footprint, the bank has amassed loans and leases worth $100.0 million, $86.8 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, F&M Bank and Trust Company exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's a look at how the bank did on the three important criteria Bankrate used to grade American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial resilience, capital is useful. It acts as a cushion against losses and affords protection for accountholders when a bank is experiencing economic trouble. When looking at safety and soundness, the more capital, the better.

F&M Bank and Trust Company fell short of the national average of 13.13 on our test to measure the adequacy of a bank's capital, achieving a score of 8 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. F&M Bank and Trust Company's Tier 1 capital ratio was 12.23 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic downturns.

Overall, F&M Bank and Trust Company held equity amounting to 9.60 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

Having a large number of these kinds of assets could eventually force a bank to use capital to absorb losses, diminishing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, F&M Bank and Trust Company scored 40 out of a possible 40 points, exceeding the national average of 37.49 points.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of December 31, 2017, 0.26 percent of F&M Bank and Trust Company's loans were noncurrent -- in other words, 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 deal with troubled assets known as an "allowance for loan and lease losses." Comparing the reserve's size to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on F&M Bank and Trust Company's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.

F&M Bank and Trust Company scored 0 out of a possible 30 on Bankrate's earnings test, falling short of 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 most recent annualized quarterly return on equity for F&M Bank and Trust Company was -3.55 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $-447,000 on total equity of $12.0 million. The bank reported an annualized return on average assets, or ROA, of -0.35 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.