Safe and Sound

First Midwest Bank of Poplar Bluff

Poplar Bluff, MO
5
Star Rating
Poplar Bluff, MO-based First Midwest Bank of Poplar Bluff is an FDIC-insured bank founded in 1964. The bank has equity of $38.4 million on $398.9 million in assets, according to December 31, 2017, regulatory filings.

With 86 full-time employees in 7 offices in MO, the bank has amassed loans and leases worth $344.8 million, including real estate loans of $239.2 million. U.S. bank customers currently have $340.9 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, First Midwest Bank of Poplar Bluff exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank fared on the three key criteria Bankrate used to grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an an institution's financial resilience, capital is key. It acts as a bulwark against losses and as protection for depositors during periods of financial instability for the bank. From a safety and soundness perspective, the higher the capital, the better.

First Midwest Bank of Poplar Bluff received a score of 10 out of a possible 30 points on our test to measure the adequacy of a bank's capital, lower than the national average of 13.13.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. First Midwest Bank of Poplar Bluff's Tier 1 capital ratio was 11.43 percent, above 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 weather economic headwinds.

Overall, First Midwest Bank of Poplar Bluff held equity amounting to 9.63 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

Having large numbers of these types of assets means a bank could eventually have to use capital to cover losses, decreasing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, reducing earnings and increasing the chances of a failure in the future.

On Bankrate's asset quality test, First Midwest Bank of Poplar Bluff scored 40 out of a possible 40 points, beating 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, 0.50 percent of First Midwest Bank of Poplar Bluff's loans were noncurrent, meaning 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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the reserve's size to the total amount of problematic loans can be a handy indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on First Midwest Bank of Poplar Bluff's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, reduce a bank's ability to do those things.

First Midwest Bank of Poplar Bluff scored 24 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 15.12.

One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. First Midwest Bank of Poplar Bluff's most recent annualized quarterly return on equity was 15.29 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank reported net income of $5.6 million on total equity of $38.4 million. The bank experienced an annualized return on average assets, or ROA, of 1.42 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.