Overview of Mt Mckinley Bank

Established more than 50 years ago, Mt Mckinley Bank is a mid-sized bank that was founded in the year 1965. The bank’s main office is located in the state of Alaska and this is also the only state in which the bank operates. Mt Mckinley Bank has been insured by the Federal Deposit Insurance Corporation since 1965 and the independent agency has provided insurance to the bank ever since. 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 $645 million ranks it in the 70th percentile of banks in the United States. Mt Mckinley 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 5 offices, all of which are located in the state of Alaska. Finally, the bank currently has a total employee base of 82 people.

Details on the Bank’s Asset Composition

The bank currently has total assets of $645 million, total net loans to customers of $231 million and total deposits outstanding of $537 million as of this writing. Overall, 46% 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, 70% of the domestic deposits outstanding are insured. Looking at the asset side of the balance sheet, 36% of the bank’s total asset base consisted of loans to customers (keep in mind that this is on a gross basis). Loans for real estate purposes alone comprised 81% of the outstanding loans. Mt Mckinley Bank has $37 million of outstanding 1-4 family residential loans (mortgages), which in total represents 16% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 1% and 17% of loans outstanding, respectively.

Contact Information For Mt Mckinley Bank

  • Main Office Address: 500 4th Ave, Fairbanks, AK 99701
  • Website: www.mtmckinleybank.com
  • Total Number of Branches: 5
  • Total Number of International Branches: None
  • Number of Employees: 82
  • FDIC Certificate Number: 19525
  • FDIC Community Bank: Yes
  • FDIC Field Office: Seattle
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 542667
  • Bank Charter Class: SB
  • Primary Regulator: FDIC

Financial Overview

mt mckinley bank-financial-metrics-dec-21

The bank had total assets of $645 million based on the latest available information. Its total assets have increased substantially over the past year, with an increase of 16.7%. Moving to the other side of the balance sheet, we see net loans of $231 million which compares with $231 million in the prior year. Therefore its clear that over the past year the bank’s net loans outstanding has reported a decrease of 0.2%. Within the loan portfolio, residential mortgages make up 16% of the outstanding loans of the bank, and over the past year have registered a decrease of 8.8%. In addition, the bank provides loans to commercial and industrial businesses, which represents 16.6% of its total lending and stood at $39 million based on the latest available information. 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 0.4% 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. Mt Mckinley Bank has total customer deposits of $537 million. Looking over the past year, its deposit base has increased substantially with a growth rate of 19.9%. Furthermore, the bank has a loan to deposit ratio of 43% which is significantly 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

mt mckinley bank-performance-metrics-dec-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 Mt Mckinley Bank compared with the average U.S. bank. When it comes to 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. 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 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 Mt Mckinley 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 25.6% which is above the average U.S. bank.

Concluding Comments on Mt Mckinley Bank

In conclusion, when we look at all the various factors and data we give Mt Mckinley 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, Mt Mckinley 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. 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.