Introduction to Hustisford State Bank

Hustisford State Bank is a relatively small bank that has been operating for over a century and that first began operations in the year 1902. The bank’s primary office is located in the city of Hustisford which is found in the state of Wisconsin. 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 $75 million ranks it in the 10th percentile of banks in the United States. Hustisford State Bank does not currently have any offices located outside of the United States, and functionally is a domestic bank. Within the U.S., the bank currently has 1 office. In terms of headcount, the bank currently has 9 employees.

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

Some of the key components of the bank’s balance sheet are total assets of $75 million, total loans extended to customers of $41 million and customer deposits of $60 million. Domestic deposits currently represent (in terms of total size), 80% of the bank’s total assets, and 100% of the bank’s total deposits outstanding. Within these deposits 85% are insured based on the latest available information. Outstanding loans to the bank’s customers makes up 56% of the bank’s assets. Within this, real estate loans represented 87% of the total and 100% of real estate loans were domestic. Hustisford State Bank has $25 million of outstanding 1-4 family residential loans (mortgages), which in total represents 60% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 2% and 6% of loans outstanding, respectively. Loans to farmland and farms represents 18% of loans outstanding.

Contact Information For Hustisford State Bank

  • Main Office Address: 200 S. Lake St., Hustisford, WI 53034
  • Website: https://www.hustisfordstatebank.com
  • Total Number of Branches: 1
  • Total Number of International Branches: None
  • Number of Employees: 9
  • FDIC Certificate Number: 12354
  • FDIC Community Bank: Yes
  • FDIC Field Office: Milwaukee
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 467144
  • Bank Charter Class: NM
  • Primary Regulator: FDIC

Financial Overview

hustisford state bank-financial-metrics-sept-21

The bank had total assets of $75 million based on the latest available information. Its total assets have increased substantially over the past year, with an increase of 17.5%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $41 million based on the latest available information. Its net loans outstanding have decreased over the past year, with a decrease of 4.0%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages, which make up the majority of the bank’s lending activities comprise 60% of the bank’s loan book. The bank has $25 million of residential mortgages outstanding, which compares with $26 million in the prior year. This implies a decrease of 3.9% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 5.8% of its total lending and stood at $2 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 17.9% of its total loan portfolio. Credit card-related lending represents 0.1% 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 1.1% 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. Hustisford State Bank has total customer deposits outstanding of $60 million. The bank’s deposit base has increased substantially over the past year, growing 24.1%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, Hustisford State Bank has a loan to deposit ratio of 69% 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. Effectively all of the bank’s deposit base is funded by domestic sources.

Bank Performance and Capital Metrics

hustisford state bank-performance-metrics-sept-21

The above chart provides a brief summary of some of the key performance metrics for Hustisford State Bank. Next to these metrics are the equivalent for the average U.S. bank. As a starting point, looking at 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 below 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 been relatively stable. In addition, we can also see that the bank is below 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 above the average U.S. bank, and has declined over the past year. Finally, we could not find Hustisford State 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 24.1% which is above the average U.S. bank.

Final Thoughts: Hustisford State Bank

In conclusion, when we look at all the various factors and data we give Hustisford State Bank a 3.5 out of 5.0 rating, which we consider to be very good. 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, Hustisford State Bank 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. Importantly, please be aware that none of the information presented is meant to be investment advice or advice of any form. All of the information and views expressed in this note and on this site are purely for informational purposes.