Dakota Community Bank: Overview of the bank

Founded in 1940, Dakota Community Bank is a mid-sized bank. The company’s main office is located in the city of Hebron in the state of North Dakota. There are a total of 68 banks operating in the state of North Dakota and combined these banks have $47,221 million of assets. Dakota Community Bank has been operating for 82 years. Dakota Community Bank has been insured by the Federal Deposit Insurance Corporation since 1940 and the independent agency has provided insurance to the bank ever since.  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 $1,068 million ranks it in the 80th percentile of banks in the United States. Dakota Community Bank is essentially a purely domestic bank from an operational standpoint. This is because the bank does not have offices outside of the United States. Within the U.S. the bank currently has 13 offices, all of which are located in the state of North Dakota. As of this writing, the bank employed a total of 167 people.

Discussion of the key components of the Bank’s Balance Sheet

The bank currently has total assets of $1,068 million, total net loans to customers of $565 million and total deposits outstanding of $966 million as of this writing. Domestic deposits currently represent (in terms of total size), 90% of the bank’s total assets, and 100% of the bank’s total deposits outstanding. Within these deposits 71% are insured based on the latest available information. Looking at the asset side of the balance sheet, 54% 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 64% of the outstanding loans. Dakota Community Bank has $42 million of outstanding 1-4 family residential loans (mortgages), which in total represents 7% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 3% and 14% of loans outstanding, respectively. Loans to farmland and farms represents 52% of loans outstanding.

Contact Information For Dakota Community Bank

  • Main Office Address: 609 Main St., Hebron, ND 58638\
  • Website: www.dakotacommunitybank.com
  • Total Number of Branches: 13
  • Total Number of International Branches: None
  • Number of Employees: 167
  • FDIC Certificate Number: 15728
  • FDIC Community Bank: Yes
  • FDIC Field Office: Fargo
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 815156
  • Bank Charter Class: N
  • Primary Regulator: OCC

Financial Overview

dakota community bank-financial-metrics-sept-21

The bank had total assets of $1,068 million based on the latest available information. Its total assets have increased substantially over the past year, with an increase of 18.2%. In terms of the bank’s lending activities, net loans represented 52.9% of its total assets, and stood at $565 million. The bank’s loan portfolio has decreased slightly over the past year, with a decrease of 0.9%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages comprise 7% of the bank’s loan book. The bank has $42 million of residential mortgages outstanding, which compares with $38 million in the prior year. This implies an increase of 8.7% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 14.1% of its total lending and stood at $81 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 52.1% of its total loan portfolio. 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 1.6% of the bank’s total lending.

Bank Liquidity and Funding

Liquidity and funding are two important considerations when evaluating a bank. It gives us a sense of how a bank finances its activities and can help both depositors and customers better understand a banks financial positioning. Oftentimes one of the cheapest forms of funding is customer deposits. Dakota Community Bank has total customer deposits outstanding of $966 million. The bank’s deposit base has increased substantially over the past year, growing 20.3%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, Dakota Community Bank has a loan to deposit ratio of 58% 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

dakota community 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 Dakota Community Bank compared with the average U.S. bank. When it comes to the bank’s return on assets, over the past year it has declined. 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 declined. In addition, we can also see that the bank is above the average bank on this metric. The bank’s total leverage ratio has declined over the past year and is currently below the national average. Finally, Dakota Community Bank’s Tier 1 capital ratio has declined over the past year. On this metric the bank is below the national average.

Conclusion: Dakota Community Bank

In conclusion, when we look at all the various factors and data we give Dakota Community Bank a 3.6 out of 5.0 rating, which we consider to be very good. Specifically, an area of strength for the bank would be its cost of funds which is above the national average. On the contrary, the bank’s net interest margin 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.