Overview of TruBank

TruBank was first established in the year 1883 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 Iowa and in the city of Indianola. The Federal Deposit Insurance Corporation has provided insurance to the bank since 1984. 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. 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 $408 million ranks it in the 60th percentile of banks in the United States. TruBank 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 8 offices, all of which are located in the state of Iowa. In terms of headcount, the bank currently has 59 employees.

Details on the Bank’s Asset Composition

The bank currently has total assets of $408 million, total net loans to customers of $217 million and total deposits outstanding of $338 million as of this writing. In total, 83% 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, 76% of the bank’s domestic deposits are insured. Outstanding loans to the bank’s customers makes up 54% of the bank’s assets. Within this, real estate loans represented 81% of the total and 100% of real estate loans were domestic. TruBank has $36 million of outstanding 1-4 family residential loans (mortgages), which in total represents 16% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 1% and 11% of loans outstanding, respectively. Loans to farmland and farms represents 23% of loans outstanding.

Contact Information For TruBank

  • Main Office Address: 1401 N. Jefferson, Orchard P, Indianola, IA 50125
  • Website: http://www.trubank.bank
  • Total Number of Branches: 8
  • Total Number of International Branches: None
  • Number of Employees: 59
  • FDIC Certificate Number: 25267
  • FDIC Community Bank: Yes
  • FDIC Field Office: Des Moines
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 862141
  • Bank Charter Class: NM
  • Primary Regulator: FDIC

Financial Overview

trubank-financial-metrics-sept-21

The bank had total assets of $408 million based on the latest available information. Its total assets have increased substantially over the past year, with an increase of 19.2%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $217 million based on the latest available information. Its net loans outstanding have increased slightly over the past year, with an increase of 2.0%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages comprise 16% of the bank’s loan book. The bank has $36 million of residential mortgages outstanding, which compares with $33 million in the prior year. This implies an increase of 10.1% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 10.9% 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 23.3% 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 0.8% 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. TruBank has total customer deposits outstanding of $338 million. The bank’s deposit base has increased substantially over the past year, growing 19.6%. In addition, the bank has a loan to deposit ratio of 64%, which is well 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. Effectively all of the bank’s deposit base is funded by domestic sources.

Bank Performance and Capital Metrics

trubank-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 TruBank compared with the average U.S. bank. When it comes to 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 below 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 declined. In addition, we can also see that the bank is below 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 TruBank’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.

Final Thoughts: TruBank

Overall, we believe TruBank deserves a rating of 2.8 out of 5.0, which is a above average 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, TruBank 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. 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.