Lusk State Bank: Overview of the bank

Founded in 1924, Lusk State Bank is a relatively small bank. The company’s main office is located in the city of Lusk in the state of Wyoming. There are a total of 30 banks operating in the state of Wyoming and combined these banks have $12,213 million of assets. Lusk State Bank has been operating for 98 years. Since 1934, 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.   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 $66 million ranks it in the 10th percentile of banks in the United States. Lusk State 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 1 office. Finally, the bank currently has a total employee base of 8 people.

Details on the Bank’s Asset Composition

As previously indicated, the bank currently has total assets of $66 million, which makes it a relatively small bank in the United States. The bank also has net loans outstanding to customers of $29 million and a deposit base of $57 million. Domestic deposits currently represent (in terms of total size), 87% of the bank’s total assets, and 100% of the bank’s total deposits outstanding. Within these deposits 83% are insured based on the latest available information. Outstanding loans to the bank’s customers makes up 45% of the bank’s assets. Within this, real estate loans represented 48% of the total and 100% of real estate loans were domestic. Lusk State Bank has $0.2 million of outstanding 1-4 family residential loans (mortgages), which in total represents 1% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 7% and 3% of loans outstanding, respectively. Loans to farmland and farms represents 81% of loans outstanding.

Contact Information For Lusk State Bank

  • Main Office Address: 445 S. Main St, Lusk, WY 82225
  • Website: http://www.luskstatebank.com
  • Total Number of Branches: 1
  • Total Number of International Branches: None
  • Number of Employees: 8
  • FDIC Certificate Number: 8724
  • FDIC Community Bank: Yes
  • FDIC Field Office: Billings
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 912550
  • Bank Charter Class: SM
  • Primary Regulator: FED

Financial Overview

lusk state bank-financial-metrics-sept-21

Lusk State Bank has total assets of $66 million and over the past year its asset base has increased, reporting an increase of 6.8%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $29 million based on the latest available information. Its net loans outstanding have decreased over the past year, with a decrease of 14.8%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages comprise 1% of the bank’s loan book. The bank has $0.2 million of residential mortgages outstanding, which compares with $0.2 million in the prior year. This implies a decrease of 23.7% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 2.9% of its total lending and stood at $1 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 80.6% 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 4.4% 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. Customer deposits is usually one of the cheapest ways to finance a bank. This is especially the case for accounts that don’t pay interest, such as checking accounts. Lusk State Bank has total customer deposits of $57 million. Looking over the past year, its deposit base has increased substantially with a growth rate of 7.4%. In addition, the bank has a loan to deposit ratio of 51%, which is significantly below the average of banks in the United States. The average in the United States is approximately 82% and as a reminder, a lower ratio indicates greater liquidity. All of the bank’s deposits are sourced from domestic depositors, which is helpful from a risk assessment standpoint.

Bank Performance and Capital Metrics

lusk state 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 Lusk State Bank compared with the average U.S. bank. When it comes to 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. 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 been relatively stable over the past year. Finally, we could not find Lusk 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 19.6% which is above the average U.S. bank.

Concluding Comments on Lusk State Bank

Overall, we believe Lusk State Bank deserves a rating of 4.5 out of 5.0, which is an exceptional 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.