Safe and Sound

Marquette Farmers State Bank of Marquette

Marquette, KS
4
Star Rating
Marquette, KS-based Marquette Farmers State Bank of Marquette is an FDIC-insured bank founded in 1906. As of December 31, 2017, the bank held equity of $5.0 million on assets of $32.4 million.

Thanks to the efforts of 7 full-time employees, the bank currently holds loans and leases worth $16.0 million, including $8.5 million worth of real estate loans. The bank currently holds $27.2 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Marquette Farmers State Bank of Marquette exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three key criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for depositors when a bank is struggling financially. It follows then that a bank's level of capital is a useful measurement of an institution's financial resilience. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a bank's capital, Marquette Farmers State Bank of Marquette racked up 22 out of a possible 30 points, better than the national average of 13.13.

A bank's Tier 1 capital ratio is an important measure of this buffer. Marquette Farmers State Bank of Marquette's Tier 1 capital ratio was 26.49 percent, above the 6 percent level considered adequate by regulators, and higher than the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to weather economic difficulties.

Overall, Marquette Farmers State Bank of Marquette held equity amounting to 15.36 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

A bank with large numbers of these kinds of assets may eventually be required to use capital to cover losses, shrinking 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 money, resulting in lower earnings and potentially more risk of a failure in the future.

Marquette Farmers State Bank of Marquette finished below the national average of 37.49 on Bankrate's asset quality test, racking up 28 out of a possible 40 points .

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 4.89 percent of Marquette Farmers State Bank of Marquette'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 keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the reserve's size to the total amount of problem loans can be a widely used indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Marquette Farmers State Bank of Marquette's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.

Marquette Farmers State Bank of Marquette underperformed the average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Marquette Farmers State Bank of Marquette's most recent annualized quarterly return on equity was 4.10 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $202,000 on total equity of $5.0 million. The bank had an annualized return on average assets, or ROA, of 0.62 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.