Introduction to Lafayette State Bank
Lafayette State Bank is a relatively small bank that has been operating for almost a century and that first began operations in the year 1946. The bank’s primary office is located in the city of Mayo which is found in the state of Florida. Since 1946, the Federal Deposit Insurance Corporation has provided insurance to the bank. Along with the National Credit Union Administration (NCUA), the FDIC is the only other governmental agency that provides deposit insurance to American depositary institutions. 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 $177 million ranks it in the 30th percentile of banks in the United States. Lafayette 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 4 offices. As of this writing, the bank employed a total of 48 people.
Discussion of the key components of the Bank’s Balance Sheet
As noted earlier, the bank has total assets of $177 million. In addition, the bank has a deposit base of $163 million and net loans outstanding of $99 million. Overall, 65% 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, 73% 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 1-4 family residential loans (mortgages) to its customers. Overall, customer loans currently make up 57% of the bank’s total assets. Lafayette State Bank has $21 million of outstanding 1-4 family residential loans (mortgages), which in total represents 21% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 3% and 13% of loans outstanding, respectively. Loans to farmland and farms represents 30% of loans outstanding.
Contact and Other Information For Lafayette State Bank
- Main Office Address: 340 W. Main St., Mayo, FL 32066
- Website: www.lafayettestatebank.com
- Total Number of Branches: 4
- Total Number of International Branches: None
- Number of Employees: 48
- FDIC Certificate Number: 16396
- FDIC Community Bank: Yes
- FDIC Field Office: Tampa
- Independent or Subsidiary Bank: Independent
- Federal Reserve ID Number: 535931
- Bank Charter Class: NM
- Primary Regulator: FDIC
Financial Overview
The bank had total assets of $177 million based on the latest available information. Its total assets have increased substantially over the past year, with an increase of 23.1%. Moving to the other side of the balance sheet, we see net loans of $99 million which compares with $94 million in the prior year. Therefore its clear that over the past year the bank’s net loans outstanding has reported an increase of 5.7%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages comprise 21% of the bank’s loan book. The bank has $21 million of residential mortgages outstanding, which compares with $20 million in the prior year. This implies an increase of 9.4% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 12.8% of its total lending and stood at $13 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 30.2% 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 0.5% 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. Lafayette State Bank has total customer deposits outstanding of $163 million. The bank’s deposit base has increased substantially over the past year, growing 22.5%. Furthermore, the bank has a loan to deposit ratio of 61% 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. 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 Lafayette State Bank compared with the average U.S. bank. Starting with its 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 declined. In addition, we can also see that the bank is below 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, Lafayette State Bank’s Tier 1 capital ratio has improved over the past year. On this metric the bank is below the national average.
Final Thoughts: Lafayette State Bank
Our final rating for Lafayette State Bank, after assessing the bank on several important metrics, is 3.0 out of 5.0, which is above average. 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 return on assets is one of the primary drawbacks on its rating as on this metric, the bank is below average. 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.