Introduction to Points West Bank
Points West Bank was first established in the year 1906 and is among just a handful of banks in the United States that have been operating for more than a century. The bank’s main office is located in the state of Colorado and in the city of Windsor. The Federal Deposit Insurance Corporation provides insurance for the bank, in addition to providing insurance to almost 5,000 other institutions in the United States. Generally speaking, the FDIC provides insurance coverage of up to $250,000 per depositor, per insured bank and for each account ownership category. Points West Bank has been insured by the FDIC since 1934 which is the year after the FDIC was created by the 1933 Banking Act. 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 $823 million ranks it in the 80th percentile of banks in the United States. Points West 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 21 offices. Finally, the bank currently has a total employee base of 153 people.
Details on the Bank’s Asset Composition
Some of the key components of the bank’s balance sheet are total assets of $823 million, total loans extended to customers of $364 million and customer deposits of $701 million. Domestic deposits currently represent (in terms of total size), 85% of the bank’s total assets, and 100% of the bank’s total deposits outstanding. Within these deposits 74% are insured based on the latest available information. Moving on to the components of the bank’s assets we can see that loans provided to customers represent 45% of the banks total assets. Of this amount, loans related to real estate activities comprised 72% of gross loans outstanding. Points West Bank has $41 million of outstanding 1-4 family residential loans (mortgages), which in total represents 11% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 2% and 9% of loans outstanding, respectively. Loans to farmland and farms represents 45% of loans outstanding.
Contact Information and Other Facts For Points West Bank
- Main Office Address: 1291 Main St., Windsor, CO 80550
- Website: www.pwcbank.com
- Total Number of Branches: 21
- Total Number of International Branches: None
- Number of Employees: 153
- FDIC Certificate Number: 3031
- FDIC Community Bank: Yes
- FDIC Field Office: Denver
- Independent or Subsidiary Bank: Independent
- Federal Reserve ID Number: 444556
- Bank Charter Class: NM
- Primary Regulator: FDIC
The bank had total assets of $823 million based on the latest available information. Its total assets have increased substantially over the past year, with an increase of 9.1%. Moving to the other side of the balance sheet, we see net loans of $364 million which compares with $433 million in the prior year. Therefore its clear that over the past year the bank’s net loans outstanding has reported a decrease of 15.8%. Residential mortgages comprise 11% of the outstanding loans of the bank. The outstanding balance of residential mortgages has decreased over the past year by 10.0%. In addition, the bank provides loans to commercial and industrial businesses, which represents 9.2% of its total lending and stood at $34 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 1.1% 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. A large and growing deposit base is usually a good sign for a bank’s liquidity and funding. This is because customer deposits are often a cheap source of financing as many of those accounts do not pay interest or much interest. Looking at Points West Bank, they have total customer deposits of $701 million which over the past year has registered an increase of 10.4%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, Points West Bank has a loan to deposit ratio of 52% which is significantly 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. All of the bank’s deposits are sourced from domestic depositors, which is helpful from a risk assessment standpoint.
Bank Performance and Capital Metrics
Moving on to the performance and capital metrics for the bank, in the above we have a chart that shows key performance metrics for Points West Bank compared with the average U.S. bank. As a starting point, looking at 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. 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 improved. In addition, we can also see that the bank is above 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. Finally, we could not find Points West 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 15.0% which is below the average U.S. bank.
Concluding Comments on Points West Bank
Overall, we believe Points West Bank deserves a rating of 4.0 out of 5.0, which is a exceptional rating. 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, Points West Bank scores well on its cost of funds, which is above the national average. However when we consider the bank’s total leverage, the bank does not have a good score mainly because it is below the national average which impacts its rating. As a reminder, our rating is based on our proprietary scoring system which uses data from an in-depth nationwide bank study we performed. None of the work presented is intended to be investment advice or advice of any sort and is presented purely for informational purposes.