Byron Bank: Overview of the bank and other helpful Information

Established in the year 1932 and with its main office located in the city of Byron in Illinois state, Byron Bank is a relatively small bank that has been operating for 90 years. The Federal Deposit Insurance Corporation has provided insurance to the bank since 1934. The FDIC is one of two governmental agencies that supplies deposit insurance to American depositary institutions. The other is the NCUA. The FDIC is also the primary federal regulator for the bank. Mainly because of its relative size and presence, the bank is considered to be a community bank, instead of a national bank. Based on our estimates, we believe its asset base of $342 million ranks it in the 50th percentile of banks in the United States. Byron Bank is primarily a domestic bank and does not have offices outside of the United States. Domestically, the bank currently has 4 offices. In terms of headcount, the bank currently has 65 employees.

Details on the Bank’s Asset Composition

As previously indicated, the bank currently has total assets of $342 million, which makes it a relatively small bank in the United States. The bank also has net loans outstanding to customers of $184 million and a deposit base of $305 million. Domestic deposits currently represent (in terms of total size), 89% of the bank’s total assets, and 100% of the bank’s total deposits outstanding. Within these deposits 75% are insured based on the latest available information. Outstanding loans to the bank’s customers makes up 54% of the bank’s assets. Within this, real estate loans represented 79% of the total and 100% of real estate loans were domestic. Byron Bank has $47 million of outstanding 1-4 family residential loans (mortgages), which in total represents 25% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 4% and 13% of loans outstanding, respectively. Loans to farmland and farms represents 9% of loans outstanding.

Contact Information For Byron Bank

Main Office Address: 200 N. Walnut, Byron, IL 61010

Website: http://www.byronbank.com

Other Facts About The Bank

Below we have detailed some additional helpful facts about the bank.

  • Total Number of Branches: 4
  • Total Number of International Branches: None
  • Number of Employees: 65
  • FDIC Certificate Number: 902
  • FDIC Community Bank: Yes
  • FDIC Field Office: Princeton
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 325534
  • Bank Charter Class: NM
  • Primary Regulator: FDIC

Financial Overview

byron bank-financial-metrics-sept-21

Byron Bank has total assets of $342 million which compares with $325 million in the prior year. This implies that over the past year, the bank’s asset base has shown an increase of 5.1%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $184 million based on the latest available information. Its net loans outstanding have decreased over the past year, with a decrease of 12.1% . Digging into the loan portfolio, we see that residential mortgages comprise 25% of the bank’s loan book. The bank has $47 million of residential mortgages outstanding, which compares with $55 million in the prior year. This implies a decrease of 14.7% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 12.7% of its total lending and stood at $24 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 8.8% of its total loan portfolio. Credit card-related lending represents 0.3% of the banks total lending. This represents the outstanding balance of credit cards that the bank has issued to its customers. Finally, the bank also engages in the provision of auto loans. These are loans provided to customers to help finance vehicle purchases. Auto loans represent 1.4% of the bank’s total lending.

Bank Liquidity and Funding

While most banks are insured by the FDIC, the insurance coverage does not always provide full protection. Therefore understanding a banks liquidity and funding is important to help assess the riskiness of a banks balance sheet. A large and growing deposit base is usually a good sign for a bank’s liquidity and funding. This is because customer deposits are often a cheap source of financing as many of those accounts do not pay interest or much interest. Looking at Byron Bank, they have total customer deposits of $305 million which over the past year has registered an increase of 6.2%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, Byron Bank has a loan to deposit ratio of 60% which is significantly below the average. A lower ratio is generally better as it indicates that the lending activities of a bank are more comfortably covered by its deposit base. Deposits, as noted earlier, are usually a cost effective source of financing. Effectively all of the bank’s deposit base is funded by domestic sources.

Bank Performance and Capital Metrics

byron bank-performance-metrics-sept-21

Moving on to the performance and capital metrics for the bank, in the above we have a chart that shows key performance metrics for Byron Bank compared with the average U.S. bank. When it comes to the bank’s return on assets, over the past year it has improved. Importantly, on this metric we can also see that the bank is above the average bank. Return on assets tells us how productive a bank is being with its asset base. Moving on to the bank’s return on equity, which tells us how much of a return the bank has generated for its owners, over the past year it has improved. In addition, we can also see that the bank is above the average bank on this metric. Another metric that is helpful in contextualizing a bank’s return on equity is its leverage ratio. A lower ratio means that the bank has a higher reliance on borrowing to deliver its return on equity. In this case, the total leverage ratio is currently below the average U.S. bank, and has been relatively stable over the past year. Finally, we could not find Byron Bank’s risk-weighted asset information for this period and therefore had to make some assumptions and estimates. We estimate that the bank had a tier 1 capital ratio of 15.8% which is below the average U.S. bank.

Concluding Comments on Byron Bank

After factoring in all the relevant information and data, our final rating for Byron Bank is 3.8 out of 5.0, which is very good. Specifically, an area of strength for the bank would be its cost of funds which is above the national average. Conversely the bank’s net interest margin is one of the primary drawbacks on its rating as on this metric, the bank is below average. As a reminder, our rating is based on our proprietary scoring system which uses data from an in-depth nationwide bank study we performed. None of the work presented is intended to be investment advice or advice of any sort and is presented purely for informational purposes.