Overview of River Falls State Bank

River Falls State Bank is a relatively small bank that has been operating for more than 50 years and that first began operations in the year 1949. The bank’s primary office is located in the city of River Falls which is found in the state of Wisconsin. The bank first got insured by the Federal Deposit Insurance Corporation in the year 1949 and has remained insured by the independent agency ever since. 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 $126 million ranks it in the 20th percentile of banks in the United States. River Falls State 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 1 office. Finally, the bank currently has a total employee base of 23 people.

Overview of the Bank’s Assets and Liabilities

As noted earlier, the bank has total assets of $126 million. In addition, the bank has a deposit base of $111 million and net loans outstanding of $74 million. Approximately 35% of the bank’s deposits outstanding were transactional deposits, while domestic depositors made up 100% of the bank’s total deposit base. 88% of the domestic deposits outstanding are insured. As we look at the composition of the banks assets, as noted earlier the bank is primarily engaged in providing 1-4 family residential loans (mortgages) and farm-related loans to its customers. Overall, customer loans currently make up 60% of the bank’s total assets. River Falls State Bank has $40 million of outstanding 1-4 family residential loans (mortgages), which in total represents 53% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 4% and 2% of loans outstanding, respectively. Loans to farmland and farms represents 4% of loans outstanding.

Contact Information For River Falls State Bank

  • Main Office Address: 124 S. 2nd St., River Falls, WI 54022
  • Website: https://www.rfstatebank.com
  • Total Number of Branches: 1
  • Total Number of International Branches: None
  • Number of Employees: 23
  • FDIC Certificate Number: 16840
  • FDIC Community Bank: Yes
  • FDIC Field Office: Eau Claire
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 955753
  • Bank Charter Class: NM
  • Primary Regulator: FDIC

Financial Overview

river falls state bank-financial-metrics-dec-21 River Falls State Bank has total assets of $126 million which compares with $118 million in the prior year. This implies that over the past year, the bank’s asset base has shown an increase of 6.7%. In terms of the bank’s lending activities, net loans represented 58.8% of its total assets, and stood at $74 million. The bank’s loan portfolio has increased over the past year, with an increase of 4.2%. Residential mortgages, which make up the majority of the bank’s lending activities comprise 53% of the outstanding loans of the bank. The outstanding balance of residential mortgages has increased substantially over the past year by 10.7%. In addition, the bank provides loans to commercial and industrial businesses, which represents 2.0% of its total lending and stood at $2 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 4.2% of its total loan portfolio. Credit card-related lending represents 0.0% 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 2.0% 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. River Falls State Bank has total customer deposits of $111 million. Looking over the past year, its deposit base has increased substantially with a growth rate of 10.0%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, River Falls 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

river falls state bank-performance-metrics-dec-21 The above chart provides a brief summary of some of the key performance metrics for River Falls State Bank. Next to these metrics are the equivalent for the average U.S. bank. As a starting point, looking at 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 above 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 below the average bank on this metric. The bank’s total leverage ratio has been relatively stable over the past year and is currently approximately inline the national average. Finally, we could not find River Falls 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 18.3% which is above the average U.S. bank.  

Conclusion: River Falls State Bank

Ultimately, after considering all of the relevant factors we rate River Falls State Bank 3.8 out of 5.0, which is 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, River Falls State 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. 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.