Overview of Thumb National Bank

Thumb National Bank was first established in the year 1895 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 Michigan and in the city of Pigeon. The Federal Deposit Insurance Corporation has provided insurance to the bank since 1934. The FDIC is one of two governmental agencies that provides deposit insurance to American depositary institutions – the other is the National Credit Union Administration (NCUA). The FDIC’s mandate is mainly to insure deposits, but the agency also examines and supervises financial institutions and manages receiverships.  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 $377 million ranks it in the 60th percentile of banks in the United States. Thumb National Bank is primarily a domestic bank and does not at the current time have operations outside of the United States. Domestically, the bank currently has 6 offices. As of this writing, the bank employed a total of 69 people.

Discussion of the key components of the Bank’s Balance Sheet

As noted earlier, the bank has total assets of $377 million. In addition, the bank has a deposit base of $336 million and net loans outstanding of $190 million. In total, 89% of the bank’s total assets are made up of domestic deposits, and domestic deposits also represent 100% of the bank’s deposit base. Overall, 71% of the bank’s domestic deposits are insured. Loans extended to customers of the bank currently comprise 51% of the bank’s total assets. Loans extended to customers for real estate purposes represented 74% of the total loans outstanding. In addition, 100% of real estate loans were domestic. Thumb National Bank has $28 million of outstanding 1-4 family residential loans (mortgages), which in total represents 14% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 2% and 12% of loans outstanding, respectively. Loans to farmland and farms represents 42% of loans outstanding.

Contact Information For Thumb National Bank

  • Main Office Address: 7254 Michigan Ave., Pigeon, MI 48755
  • Website: www.thumb.bank
  • Total Number of Branches: 6
  • Total Number of International Branches: None
  • Number of Employees: 69
  • FDIC Certificate Number: 14513
  • FDIC Community Bank: Yes
  • FDIC Field Office: Detroit
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 698649
  • Bank Charter Class: SM
  • Primary Regulator: FED

Financial Overview


thumb national bank-financial-metrics-sept-21Thumb National Bank has total assets of $377 million and over the past year its asset base has increased substantially, reporting an increase of 17.0%. Moving to the other side of the balance sheet, we see net loans of $190 million which compares with $218 million in the prior year. Therefore its clear that over the past year the bank’s net loans outstanding has reported a decrease of 13.0%. Within the loan portfolio, residential mortgages make up 14% of the outstanding loans of the bank, and over the past year have registered an increase of 13.7%. In addition, the bank provides loans to commercial and industrial businesses, which represents 12.4% of its total lending and stood at $24 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 41.6% 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 1.0% 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. Oftentimes one of the cheapest forms of funding is customer deposits. Thumb National Bank has total customer deposits outstanding of $336 million. The bank’s deposit base has increased substantially over the past year, growing 18.5%. In addition, the bank has a loan to deposit ratio of 56%, which is significantly below the average of banks in the United States. The average in the United States is approximately 82% and as a reminder, a lower ratio indicates greater liquidity. All of the bank’s deposits are sourced from domestic depositors, which is helpful from a risk assessment standpoint.

Bank Performance and Capital Metrics

thumb national bank-performance-metrics-sept-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 Thumb National 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. 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 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. Last but certainly not least is the tier 1 capital ratio. This is an important measure of the financial strength of a bank and its balance sheet. Thumb National Bank’s tier 1 capital ratio has improved over the past year, and is below the average U.S. bank.

Concluding Comments on Thumb National Bank

After factoring in all the relevant information and data, our final rating for Thumb National Bank is 3.6 out of 5.0, which is very good. Specifically, an area of strength for the bank would be its net interest margin which is above the national average. On the contrary, the bank’s tier 1 capital is one of the primary drawbacks on its rating as on this metric, the bank is below average. 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.