Lyons Federal Bank: Overview of the bank

Lyons Federal Bank was established in 1913 and is one of a select number of banks in the country that have existed for over a century. Its main office is located in the state of Kansas in the city of Lyons. Kansas is home to 217 banks that collectively have $88,538 million of assets outstanding. Lyons Federal Bank has been insured by the Federal Deposit Insurance Corporation since 1935 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 $144 million ranks it in the 30th percentile of banks in the United States. Lyons Federal 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. In terms of headcount, the bank currently has 22 employees.

Overview of the Bank’s Assets and Liabilities

As noted earlier, the bank has total assets of $144 million. In addition, the bank has a deposit base of $121 million and net loans outstanding of $92 million. Overall, 42% 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, 79% 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 65% of the bank’s total assets. Lyons Federal Bank has $28 million of outstanding 1-4 family residential loans (mortgages), which in total represents 30% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 5% and 7% of loans outstanding, respectively. Loans to farmland and farms represents 45% of loans outstanding.

Contact Information For Lyons Federal Bank

  • Main Office Address: 200 E. Ave S., Lyons, KS 67554
  • Website: www.lyonsfed.com
  • Total Number of Branches: 4
  • Total Number of International Branches: None
  • Number of Employees: 22
  • FDIC Certificate Number: 27727
  • FDIC Community Bank: Yes
  • FDIC Field Office: Hays
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 901974
  • Bank Charter Class: SA
  • Primary Regulator: OCC

Financial Overview

lyons federal bank-financial-metrics-sept-21

Lyons Federal Bank has total assets of $144 million and over the past year its asset base has increased, reporting an increase of 5.0%. Moving to the other side of the balance sheet, we see net loans of $92 million which compares with $86 million in the prior year. Therefore its clear that over the past year the bank’s net loans outstanding has reported an increase of 7.0%. Within the loan portfolio, residential mortgages make up 30% of the outstanding loans of the bank, and over the past year have registered an increase of 11.8%. In addition, the bank provides loans to commercial and industrial businesses, which represents 7.3% of its total lending and stood at $7 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 44.8% 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 3.2% of the bank’s total lending.

Bank Liquidity and Funding

How a bank funds its activities is an important area to assess and monitor. As a depositor you want to make sure the bank is conservatively funded, and the same goes for customers. 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. Lyons Federal Bank has total customer deposits of $121 million. Looking over the past year, its deposit base has increased substantially with a growth rate of 8.8%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, Lyons Federal Bank has a loan to deposit ratio of 76% which is 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. The entirety of the bank’s deposit base stems from domestic depositors.

Bank Performance and Capital Metrics

lyons federal bank-performance-metrics-sept-21

Above we have shown a summary of some of the performance metrics for Lyons Federal 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. 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 Lyons Federal 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 21.5% which is above the average U.S. bank.

Conclusion: Lyons Federal Bank

Overall, we believe Lyons Federal Bank deserves a rating of 3.3 out of 5.0, which is a above average rating. While for example, the bank shines when it comes to its cost of funds, which is above the national average, its net interest margin is a downward force on its rating. On this metric, the bank is below the national 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.