Community Spirit Bank: Overview of the bank

Community Spirit Bank is a relatively small bank that has been operating for over a century and that first began operations in the year 1908. The bank’s primary office is located in the city of Red Bay which is found in the state of Alabama. Community Spirit Bank has been insured by the Federal Deposit Insurance Corporation since 1934 which is actually the first full year the FDIC existed. The agency was created in 1933 by the passing of the 1933 Banking Act. The FDIC is also serves as the primary federal regulator for the bank. Mainly because of its relative size, geographic reach 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 $176 million ranks it in the 30th percentile of banks in the United States. Community Spirit Bank is primarily a domestic bank and does not at the current time have operations outside of the United States. Domestically, the bank currently has 6 offices. As of this writing, the bank employed a total of 35 people.

Overview of the Bank’s Assets and Liabilities

As previously indicated, the bank currently has total assets of $176 million, which makes it a relatively small bank in the United States. The bank also has net loans outstanding to customers of $106 million and a deposit base of $155 million. Overall, 51% of the bank’s deposits outstanding were transactional deposits. Transactional accounts are accounts like checking accounts which will tend to have more volatile balances. From an operational standpoint non-transactional accounts are more stable and attractive. In terms of the location of depositors, domestic depositors made up 100% of the bank’s total deposit base. Within this, 84% of the domestic deposits outstanding are insured. Looking at the asset side of the balance sheet, 61% of the bank’s total asset base consisted of loans to customers (keep in mind that this is on a gross basis). Loans for real estate purposes alone comprised 70% of the outstanding loans. Community Spirit Bank has $35 million of outstanding 1-4 family residential loans (mortgages), which in total represents 33% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 7% and 18% of loans outstanding, respectively. Loans to farmland and farms represents 16% of loans outstanding.

Contact Information For Community Spirit Bank

  • Main Office Address: 200 4th Ave. Sw, Red Bay, AL 35582
  • Website:
  • Total Number of Branches: 6
  • Total Number of International Branches: None
  • Number of Employees: 35
  • FDIC Certificate Number: 50
  • FDIC Community Bank: Yes
  • FDIC Field Office: Shelby
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 470032
  • Bank Charter Class: NM
  • Primary Regulator: FDIC

Financial Overview

community spirit bank-financial-metrics-sept-21

Community Spirit Bank has total assets of $176 million and over the past year its asset base has increased substantially, reporting an increase of 10.9%. In terms of the bank’s lending activities, net loans represented 60.1% of its total assets, and stood at $106 million. The bank’s loan portfolio has decreased over the past year, with a decrease of 7.2%. Residential mortgages comprise 33% of the outstanding loans of the bank. The outstanding balance of residential mortgages has decreased over the past year by 6.8%. In addition, the bank provides loans to commercial and industrial businesses, which represents 18.3% of its total lending and stood at $20 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 15.6% of its total loan portfolio. Credit card-related lending represents 0.7% 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 2.5% 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 bank’s balance sheet. Oftentimes one of the cheapest forms of funding is customer deposits. Community Spirit Bank has total customer deposits outstanding of $155 million. The bank’s deposit base has increased substantially over the past year, growing 13.8%. Furthermore, the bank has a loan to deposit ratio of 68% which is well below the national average. Banks in the United States have a loan to deposit ratio of approximately 82%. A lower ratio is better since it means that a bank’s lending activities are more comfortably covered by its deposit base. Effectively all of the bank’s deposit base is funded by domestic sources.

Bank Performance and Capital Metrics

community spirit 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 Community Spirit Bank compared with the average U.S. bank. As a starting point, looking at 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. Next, looking at 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. The bank’s total leverage ratio has been relatively stable over the past year and is currently below the national average. Finally, we could not find Community Spirit 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 16.1% which is below the average U.S. bank.

Final Thoughts: Community Spirit Bank

Our final rating for Community Spirit Bank, after assessing the bank on several important metrics, is 3.8 out of 5.0, which is very good. Specifically, an area of strength for the bank would be its net interest margin which is above the national average. On the contrary, the bank’s total leverage is one of the primary drawbacks on its rating as on this metric, the bank is below average. Finally, please note that the rating information is based on our proprietary scoring system. This system was developed by us and leverages data from a nationwide bank study. Importantly, keep in mind that none of the work presented is intended to be investment advice or advice of any sort and is presented purely for informational purposes.