Overview of Middletown Valley Bank
The Middletown Valley Bank is a mid-sized bank whose main office is based in the state of Maryland. The bank is primarily engaged in providing 1-4 family residential loans (mortgages) to its customers, but also provides commercial & industrial loans. The bank was founded in the year 1908. 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. The FDIC is also serves as the primary federal regulator for the bank. 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 $774 million ranks it in the 70th percentile of banks in the United States. Middletown Valley Bank is essentially a purely domestic bank from an operational standpoint. This is because the bank does not have offices outside of the United States. Within the U.S. the bank currently has 8 offices, all of which are located across multiple states in the country. As of this writing, the bank employed a total of 135 people.
Overview of the Bank’s Assets and Liabilities
Some of the key components of the bank’s balance sheet are total assets of $774 million, total loans extended to customers of $568 million and customer deposits of $702 million. Approximately 49% of the bank’s deposits outstanding were transactional deposits, while domestic depositors made up 100% of the bank’s total deposit base. 77% of the domestic deposits outstanding are insured. Outstanding loans to the bank’s customers makes up 74% of the bank’s assets. Within this, real estate loans represented 73% of the total and 100% of real estate loans were domestic. Middletown Valley Bank has $157 million of outstanding 1-4 family residential loans (mortgages), which in total represents 27% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 0% and 27% of loans outstanding, respectively. Loans to farmland and farms represents 3% of loans outstanding.
Contact Information For Middletown Valley Bank
- Main Office Address: 24 W. Main St., Middletown, MD 21769
- Website: www.mvbbank.com
- Total Number of Branches: 8
- Total Number of International Branches: None
- Number of Employees: 135
- FDIC Certificate Number: 14017
- FDIC Community Bank: Yes
- FDIC Field Office: Baltimore
- Independent or Subsidiary Bank: Independent
- Federal Reserve ID Number: 41825
- Bank Charter Class: NM
- Primary Regulator: FDIC
Middletown Valley Bank has total assets of $774 million which compares with $660 million in the prior year. This implies that over the past year, the bank’s asset base has shown an increase of 17.2%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $568 million based on the latest available information. Its net loans outstanding have increased slightly over the past year, with an increase of 2.8%. Residential mortgages comprise 27% of the outstanding loans of the bank. The outstanding balance of residential mortgages has increased substantially over the past year by 21.2%. In addition, the bank provides loans to commercial and industrial businesses, which represents 26.5% of its total lending and stood at $152 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 3.5% 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 0.0% 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. 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. Middletown Valley Bank has total customer deposits of $702 million. Looking over the past year, its deposit base has increased substantially with a growth rate of 18.6%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, Middletown Valley Bank has a loan to deposit ratio of 81% 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. Effectively all of the bank’s deposit base is funded by domestic sources.
Bank Performance and Capital Metrics
The above chart provides a brief summary of some of the key performance metrics for Middletown Valley Bank. Next to these metrics are the equivalent for 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 below 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 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. 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. Middletown Valley Bank’s tier 1 capital ratio has improved over the past year, and is below the average U.S. bank.
Final Thoughts: Middletown Valley Bank
In conclusion, when we look at all the various factors and data we give Middletown Valley Bank a 2.8 out of 5.0 rating, which we consider to be 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. 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.