Overview of Napoleon State Bank

Founded in 1903, Napoleon State Bank is a relatively small bank. The company’s main office is located in the city of Napoleon in the state of Indiana. There are a total of 93 banks operating in the state of Indiana and combined these banks have $133,134 million of assets. Napoleon State Bank has been operating for 119 years. 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. 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 $409 million ranks it in the 60th percentile of banks in the United States. Napoleon State 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 7 offices, all of which are located in the state of Indiana. In terms of headcount, the bank currently has 83 employees.

Overview of the Bank’s Assets and Liabilities

As previously indicated, the bank currently has total assets of $409 million, which makes it a relatively small bank in the United States. The bank also has net loans outstanding to customers of $242 million and a deposit base of $367 million. Overall, 38% 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, 85% of the domestic deposits outstanding are insured. Looking at the asset side of the balance sheet, 60% 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 71% of the outstanding loans. Napoleon State Bank has $75 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 9% and 10% of loans outstanding, respectively. Loans to farmland and farms represents 32% of loans outstanding.

Contact Information For Napoleon State Bank

  • Main Office Address: 8912 N Ushwy 421, Napoleon, IN 47034
  • Website: http://www.napoleonstatebank.com
  • Total Number of Branches: 7
  • Total Number of International Branches: None
  • Number of Employees: 83
  • FDIC Certificate Number: 10101
  • FDIC Community Bank: Yes
  • FDIC Field Office: Indianapolis
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 944047
  • Bank Charter Class: NM
  • Primary Regulator: FDIC

Financial Overview

napoleon state bank-financial-metrics-dec-21

Napoleon State Bank has total assets of $409 million and over the past year its asset base has increased substantially, reporting an increase of 16.7%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $242 million based on the latest available information. Its net loans outstanding have increased substantially over the past year, with an increase of 7.2%. 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 2.9%. In addition, the bank provides loans to commercial and industrial businesses, which represents 10.1% of its total lending and stood at $25 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 32.1% 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 5.4% 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. Oftentimes one of the cheapest forms of funding is customer deposits. Napoleon State Bank has total customer deposits outstanding of $367 million. The bank’s deposit base has increased substantially over the past year, growing 18.8%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, Napoleon State Bank has a loan to deposit ratio of 66% which is well 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

napoleon state bank-performance-metrics-dec-21

Above we have shown a summary of some of the performance metrics for Napoleon 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. 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 declined. 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 below the average U.S. bank, and has declined over the past year. Finally, we could not find Napoleon 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 14.6% which is below the average U.S. bank.

Concluding Comments on Napoleon State Bank

Our final rating for Napoleon State Bank, after assessing the bank on several important metrics, is 3.6 out of 5.0, which is very good. While for example, the bank shines when it comes to its cost of funds, which is above the national average, its total leverage is a downward force on its rating. On this metric, the bank is below the national 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.