Woodlands National Bank: Overview of the bank

Woodlands National Bank was established in 1908 and is one of a select number of banks in the country that have existed for over a century. Its main office is located in the state of Minnesota in the city of Hinckley. Minnesota is home to 265 banks that collectively have $106,775 million of assets outstanding. The bank first got insured by the Federal Deposit Insurance Corporation in the year 1934 which is effectively the first year it was possible to get insured by the agency, which itself was founded in the prior year.  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 $351 million ranks it in the 50th percentile of banks in the United States. Woodlands National Bank 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 7 offices, all of which are located in the state of Minnesota. Finally, the bank currently has a total employee base of 51 people.

Overview of the Bank’s Assets and Liabilities

As noted earlier, the bank has total assets of $351 million. In addition, the bank has a deposit base of $317 million and net loans outstanding of $144 million. Approximately 65% of the bank’s deposits outstanding were transactional deposits, while domestic depositors made up 100% of the bank’s total deposit base. 77% of the domestic deposits outstanding are insured. Moving on to the components of the bank’s assets we can see that loans provided to customers represent 42% of the banks total assets. Of this amount, loans related to real estate activities comprised 51% of gross loans outstanding. Woodlands National Bank has $15 million of outstanding 1-4 family residential loans (mortgages), which in total represents 10% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 10% and 30% of loans outstanding, respectively. Auto loans represents 2% of loans outstanding.

Contact Information For Woodlands National Bank

  • Main Office Address: 122 Main St., Hinckley, MN 55037
  • Website: www.woodlandsnationalbank.com
  • Total Number of Branches: 7
  • Total Number of International Branches: None
  • Number of Employees: 51
  • FDIC Certificate Number: 1417
  • FDIC Community Bank: Yes
  • FDIC Field Office: Minneapolis
  • Independent or Subsidiary Bank: Independent
  • Federal Reserve ID Number: 980951
  • Bank Charter Class: N
  • Primary Regulator: OCC

Financial Overview

woodlands national bank-financial-metrics-dec-21

The bank had total assets of $351 million based on the latest available information. Its total assets have increased substantially over the past year, with an increase of 18.5%. Moving to the bank’s loan portfolio, the bank has net loans outstanding of $144 million based on the latest available information. Its net loans outstanding have decreased over the past year, with a decrease of 15.6%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages comprise 10% of the bank’s loan book. The bank has $15 million of residential mortgages outstanding, which compares with $15 million in the prior year. This implies a decrease of 2.6% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 30.4% of its total lending and stood at $45 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 0.5% 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 1.8% of the bank’s total lending.

Bank Liquidity and Funding

How a bank funds its activities is an important area to assess and monitor. As a depositor you want to make sure the bank is conservatively funded, and the same goes for customers. 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. Woodlands National Bank has total customer deposits of $317 million. Looking over the past year, its deposit base has increased substantially with a growth rate of 20.3%. Furthermore, the bank has a loan to deposit ratio of 46% which is significantly 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

woodlands national bank-performance-metrics-dec-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 Woodlands National Bank compared with the average U.S. bank. Starting with its 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. 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, Woodlands National Bank’s Tier 1 capital ratio has been relatively stable over the past year. On this metric the bank is above the national average.

Final Thoughts: Woodlands National Bank

After factoring in all the relevant information and data, our final rating for Woodlands National Bank is 3.5 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, Woodlands National 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. Finally, please note that the rating information is based on our proprietary scoring system. This system was developed by us and leverages data from a nationwide bank study. Importantly, keep in mind that none of the work presented is intended to be investment advice or advice of any sort and is presented purely for informational purposes.