The Riddell National Bank: Overview of the bank

Established in 1885, The Riddell National Bank is a relatively small bank. The company’s main office is located in the city of Brazil 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. The Riddell National Bank has been operating for 137 years. 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. The Riddell National Bank has been insured by the FDIC since 1934 which is the year after the FDIC was created by the 1933 Banking Act.  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 $272 million ranks it in the 50th percentile of banks in the United States. The Riddell National Bank does not currently have any offices located outside of the United States, and operationally is a purely domestic bank. Within the U.S., the bank currently has 5 offices. Finally, the bank currently has a total employee base of 64 people.

Overview of the Bank’s Assets and Liabilities

The bank currently has total assets of $272 million, total net loans to customers of $186 million and total deposits outstanding of $236 million as of this writing. Domestic deposits currently represent (in terms of total size), 87% of the bank’s total assets, and 100% of the bank’s total deposits outstanding. Within these deposits 88% are insured based on the latest available information. Looking at the asset side of the balance sheet, 69% of the bank’s assets consisted of loans to customers, this is on a gross basis. Real estate loans alone comprised 74% of the outstanding loans. The Riddell National Bank has $81 million of outstanding 1-4 family residential loans (mortgages), which in total represents 43% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 7% and 16% of loans outstanding, respectively. Loans to farmland and farms represents 7% of loans outstanding.

Contact Information and Other Facts For The Riddell National Bank

  • Main Office Address: 1 E. National Ave., Brazil, IN 47834
  • Website: http://www.riddellonline.com
  • Total Number of Branches: 5
  • Total Number of International Branches: None
  • Number of Employees: 64
  • FDIC Certificate Number: 4318
  • FDIC Community Bank: Yes
  • FDIC Field Office: Indianapolis
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 319047
  • Bank Charter Class: N
  • Primary Regulator: OCC

Financial Overview

the riddell national bank-financial-metrics-sept-21

The Riddell National Bank has total assets of $272 million which compares with $256 million in the prior year. This implies that over the past year, the bank’s asset base has shown an increase of 6.0%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $186 million based on the latest available information. Its net loans outstanding have decreased over the past year, with a decrease of 5.7%. Digging into the loan portfolio, we see that residential mortgages comprise 43% of the bank’s loan book. The bank has $81 million of residential mortgages outstanding, which compares with $83 million in the prior year. This implies a decrease of 2.4% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 16.3% of its total lending and stood at $31 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 7.2% of its total loan portfolio. Credit card-related lending represents 0.5% of the banks total lending. This represents the outstanding balance of credit cards that the bank has issued to its customers. 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 4.3% 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. Oftentimes one of the cheapest forms of funding is customer deposits. The Riddell National Bank has total customer deposits outstanding of $236 million. The bank’s deposit base has increased substantially over the past year, growing 8.5%. Furthermore, the bank has a loan to deposit ratio of 79% which is 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. The entirety of the bank’s deposit base stems from domestic depositors.

Bank Performance and Capital Metrics

the riddell national bank-performance-metrics-sept-21

Above we have shown a summary of some of the performance metrics for The Riddell National 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 been relatively stable over the past year. Finally, The Riddell National Bank’s Tier 1 capital ratio has improved over the past year. On this metric the bank is below the national average.

Conclusion: The Riddell National Bank

Our final rating for The Riddell National Bank, after assessing the bank on several important metrics, is 3.0 out of 5.0, which is above average. 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, The Riddell National Bank scores well on its cost of funds, which is above the national average. However when we consider the bank’s return on assets, the bank does not have a good score mainly because it is below the national average which impacts its rating. 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.