Safe and Sound

F & M Bank and Trust Company

Manchester, GA
NR
Star Rating
F & M Bank and Trust Company is an FDIC-insured bank founded in 1948 and currently headquartered in Manchester, GA. The bank holds equity of $3.6 million on assets of $73.3 million, according to December 31, 2017, regulatory filings.

With 23 full-time employees, the bank currently holds loans and leases worth $48.8 million, including real estate loans of $43.4 million. U.S. bank customers currently have $62.6 million in deposits with the bank.

Overall, Bankrate did not have enough information on this institution to give it a star rating. Here's an analysis of how the bank fared on the three major criteria Bankrate used to evaluate American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for account holders when a bank is struggling financially. Therefore, when it comes to measuring an a bank's financial strength, capital is useful. When looking at safety and soundness, the higher the capital, the better.

F & M Bank and Trust Company fell below the national average of 13.13 on our test to measure capital adequacy, scoring 0 out of a possible 30 points.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. F & M Bank and Trust Company's Tier 1 capital ratio was 7.18 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial challenges.

Overall, F & M Bank and Trust Company held equity amounting to 4.87 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

A bank with lots of these types of assets may eventually be required to use capital to absorb losses, diminishing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the bank, resulting in lower earnings and potentially more risk of a failure in the future.

F & M Bank and Trust Company finished below the national average of 37.49 on Bankrate's test of asset quality, racking up 0 out of a possible 40 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, 2.03 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 above the national average of 1.01 percent.

Banks maintain a reserve to handle troubled assets known as an "allowance for loan and lease losses." How large that reserve is can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. 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

A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.

F & M Bank and Trust Company fell behind the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for F & M Bank and Trust Company was -14.65 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $-560,000 on total equity of $3.6 million. The bank experienced an annualized return on average assets, or ROA, of -0.73 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.