Introduction to Dewitt Bank and Trust
Dewitt Bank and Trust was first established in the year 1933. The bank’s main office is located in the state of Iowa and in the city of Dewitt. The bank first got insured by the Federal Deposit Insurance Corporation in the year 1934 which is effectively the first year it was possible to get insured by the agency, which itself was founded in the prior year. In addition, the FDIC is the primary federal regulator for the bank and is focused on supervising and examining the bank for operational safety and soundness. 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 $226 million ranks it in the 40th percentile of banks in the United States. Dewitt Bank and Trust is primarily a domestic bank and does not at the current time have operations outside of the United States. Domestically, the bank currently has 2 offices. In terms of headcount, the bank currently has 52 employees.
Overview of the Bank’s Assets and Liabilities
Some of the key components of the bank’s balance sheet are total assets of $226 million, total loans extended to customers of $143 million and customer deposits of $203 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, 69% of the domestic deposits outstanding are insured. As we look at the composition of the banks assets, as noted earlier the bank is primarily engaged in providing farm-related loans and commercial & industrial loans to its customers. Overall, customer loans currently make up 64% of the bank’s total assets. Dewitt Bank and Trust has $20 million of outstanding 1-4 family residential loans (mortgages), which in total represents 14% 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 46% of loans outstanding.
Contact Information For Dewitt Bank and Trust
- Main Office Address: 815 6th Ave., Dewitt, IA 52742
- Website: www.dewittbank.com
- Total Number of Branches: 2
- Total Number of International Branches: None
- Number of Employees: 52
- FDIC Certificate Number: 14705
- FDIC Community Bank: Yes
- FDIC Field Office: Cedar Rapids
- Independent or Subsidiary Bank: Independent
- Federal Reserve ID Number: 668147
- Bank Charter Class: NM
- Primary Regulator: FDIC
Dewitt Bank and Trust has total assets of $226 million which compares with $207 million in the prior year. This implies that over the past year, the bank’s asset base has shown an increase of 9.2%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $143 million based on the latest available information. Its net loans outstanding have decreased slightly over the past year, with a decrease of 1.2%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages comprise 14% of the bank’s loan book. The bank has $20 million of residential mortgages outstanding, which compares with $19 million in the prior year. This implies an increase of 4.0% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 14.0% 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 46.0% 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 2.6% 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. 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 Dewitt Bank and Trust, they have total customer deposits of $203 million which over the past year has registered an increase of 13.2%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, Dewitt Bank and Trust has a loan to deposit ratio of 71% which is well 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. All of the bank’s deposits are sourced from domestic depositors, which is helpful from a risk assessment standpoint.
Bank Performance and Capital Metrics
Above we have shown a summary of some of the performance metrics for Dewitt Bank and Trust compared with the average U.S. bank. Starting with its 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. The bank’s total leverage ratio has been relatively stable over the past year and is currently below the national average. Last but certainly not least is the tier 1 capital ratio. This is an important measure of the financial strength of a bank and its balance sheet. Dewitt Bank and Trust’s tier 1 capital ratio has improved over the past year, and is below the average U.S. bank.
Concluding Comments on Dewitt Bank and Trust
After factoring in all the relevant information and data, our final rating for Dewitt Bank and Trust is 3.3 out of 5.0, which is above average. There are many factors that go into the calculation of our rating and almost all banks will have both positive and negative contributors. As an example, Dewitt Bank and Trust scores well on its cost of funds, which is above the national average. However when we consider the bank’s net interest margin, the bank does not have a good score mainly because it is below the national average which impacts its rating. 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.