Finance Assignment- The Bank Analysis
This Finance assignment has 18 questions, and should be done in word file. I have listed below all the info you need, but if you hvae any questions please let me know. |
EarningsProfitabilityAnalysis Great Western BankSioux Falls, SD Summary Ratios, UBPR Page 1 Earnings & Profitability Common Size Income Statement with Each Item as a % of Average Total Assets % of Average Assets9/30 219/30/219/30/209/30/20 %BankPG2BankPG2 Interest Income (IR%)3.232.923.793.36 Interest Expense (IE%)0.140.160.470.43 Net Interest Income (NIM)3.092.763.322.93 Non-Interest Income (NIR%)0.550.84-0.370.83 Non-interest expense (NIE%)1.822.009.742.22 Burden %1.271.1610.111.39 Provision for Loan Loss %-0.47-0.121.150.62 Operating Income (OROA)2.291.72-7.940.92 Security Gain or Loss %0.000.010.080.03 Net Operating Income b. taz2.291.73-7.860.95 NetIncome af. Tax & Adjusmt.1.731.34-7.460.78 Includes Adjustment for Subchp. S. org. Capitalization 9/30/219/30/219/30/209/30/20 Tier One Leverage Ratio:BankPG2BankPG2 Equity to Assets %10.599.339.329.31 BurdenAnalysis Great Western BankBurden Analysis (Page 03 UBPR) % of Average Assets9/30/219/30/219/30/209/30/20 Different types of Expenses as % AssetsBANKPG2BANKPG2 Personnel Expense1.171.071.151.08 Occupancy Expense0.170.220.190.23 Other Operating Expense0.480.678.400.83 Total Overhead Expense1.821.969.742.14 Non-Interest Income0.550.84-0.370.83 Overhead less Nonint. Income1.271.1210.111.31 Efficiency Ratio50.0857.74330.0556.25 Per Employee Ave Expense ($000)92.19125.8887.53117.32 Assets per Employee ($ million)7.8313.667.5313.69 % Premises & Fixed Assets1.060.981.111.07 NIM Analysis Great Western Bank UBPR Ratios for NIM Analysis Margin Analysis p. 019/30/219/30/219/30/209/30/20 Volume RatiosBankPG2BankPG2 % Average Assets Ave Earning Assets95.1393.6494.3792.89 Ave Int. Bearing Funds73.0273.0182.9878.22 % Net Loans & Leases61.5159.7678.8566.39 NIM as a % of Earning Assets Interest Income as % Earn. Assets3.403.154.013.63 Interest Expense as % Earn.Assets0.140.180.490.46 NIM Using Earning Assets3.262.973.523.17 Asset Mix % Ratios p. 079/30/219/30/219/30/209/30/20 Assets as % of Total Ave AssetsBankPG2BankPG2 Net Loans & Leases61.5159.7678.8566.39 Int. Bearing Bank Balances9.819.131.325.21 Fed Funds Sold & Reales0.600.130.000.12 Trading Account Assets0.000.170.000.25 Held to Maturity Securities1.122.240.031.95 Available for Sale Securities17.1015.4415.0313.86 Noninterest Cash & Due from Banks1.300.941.321.01 Premises, Fixed Assets &Capital Leases1.060.981.111.07 Other Real Estate Owned (OREO)0.100.020.200.03 Acceptances & Other Assets3.115.223.745.94 Loan Mix % Ave Gross Loans p.7A9/30/219/30/219/30/209/30/20 Loan Mix PercentagesBankPG2BankPG2 % Types of Loans as % of Total Loans Loans to Individuals (Consumer Loans)0.515.080.514.94 Non-depository and Other Loans1.413.731.253.82 Commercial & Industrial Loans16.8020.7016.0121.37 Agricultural Loans9.030.379.650.36 Municipal Loans8.431.488.101.46 Real Estate Loans63.8264.2464.4962.83 Page 7A9/30/219/30/219/30/209/30/20 Types of Real Estate LoansBankPG2BankPG2 Construction & Development Loans5.056.165.265.87 Non-Farm Non-Residential36.8926.9438.1125.90 Secured by Farmland8.110.668.920.61 Other Non-Farm Non-Residential22.6017.3924.8416.62 Multifamily Loans6.325.384.805.37 1-4 Family Residential Loans7.4520.217.3820.40 Home Equity Loans1.272.441.602.61 Owner Occupied Non-Farm Non-Resid.14.298.6613.278.78 Loan Rate Analysis: Rate % Page 03 Asset Yields %9/30/219/30/219/30/209/30/20 Average Loan Rates %BankPG2BankPG2 Total Loans & Leases Ave Rate4.324.074.414.23 Real Estate Loans Ave Rate4.143.884.554.14 Commercial Loans Ave Rate4.804.394.464.01 Consumer Loans Ave Rate7.465.108.005.31 Agricultural Loans Ave Rate4.354.324.214.41 Investment Securities Ave Rate1.501.752.142.35 Liability Mix Analysis for Types of Liabs.9/30/219/30/219/30/209/30/20 % of Total Assets page 06BankPG2BankPG2 Demand Deposits26.9715.656.499.28 Now Accounts0.003.220.002.04 Money Market Deposit Accts.30.9536.6931.4136.88 Other Savings Deposits23.9013.4234.3115.27 Insured Time Deposits5.215.108.577.70 Less Insured Brokered Deposits1.142.063.093.12 Total Core Deposits85.9078.5477.7072.61 Full Insured Brokered Deposits1.142.063.093.12 Time Deposits Above Insurance Limit1.621.933.172.69 Total Deposits88.6683.7683.9580.31 Federal Funds & Repos0.610.860.531.00 Total Fed Home Loan Borrowings0.930.953.792.84 Total Other Borrowing 0.000.450.040.74 Memo: % Short-term Non-Core Funding3.166.008.079.55 All Brokered Deposits1.142.243.093.44 Liability Rates (page 03)9/30/219/30/219/30/209/30/20 Rates for Different Types of Deposits %BankPG2BankPG2 Total Interest Bearing Deposits0.150.200.480.50 Transaction Accounts0.200.160.410.40 Other Savings Accounts0.100.130.340.31 Time Deposits0.440.671.291.46 Rates for Non-Deposit Liabilities Fed Funds Purchases & Repos0.080.170.120.57 Other Borrowed Money2.821.292.341.52 Ave Rate All Interest Bearing Funds0.190.240.560.56 Ave Rate for Uninsured Deposits0.750.711.781.52 Risk Analysis Risk Ratios Great WesternUBPR Bank9/30/21 Credit RiskAnalysis Loan & Lease Analysis9/30/219/30/219/30/209/30/20 Percentages %Page 7BankPG2BankPG2 Net Loss to Average Total Assets0.260.090.440.21 Net Losses by Loan Type Real Estate Loans0.320.030.130.03 Construction & Development-0.050.01-0.020.01 Agricultural Loans0.040.011.740.12 Commercial Loans0.300.140.830.43 Consumer Loans0.160.475.380.79 Analysis of Concentration of Credit P. 7B9/30/219/30/219/30/209/30/20 Loan & Leases as % of Total CapitalBankPG2BankPG2 Real Estate Loans353.53401.18479.25418.84 Construction & Development25.7539.9638.2940.49 Other Constr. & Land Devel.20.0431.0631.0531.92 Other Construction & Land Development Agricultural Loans49.922.2866.192.29 Commercial Loans82.28114.86134.84159.83 Consumer Loans2.8834.313.7332.74 Municipal Loans48.069.3359.539.95 Overall Loan Loss & Coverage Ratios9/30/219/30/219/30/209/30/20 Page 01%'s BankPG2BankPG2 Net Loss to Average Total Loans & Leases0.260.090.440.21 Earnings Coverage of Net Losses9.9954.02-19.5826.71 Loan Allowance to Net Losses10.7324.013.3913.51 Loan Allowance to Total Loans3.011.291.491.42 Total Loans 90+ Days Past Due0.000.060.000.06 % NonAccrual Loans2.410.473.220.54 Liquidity Analysis Page 019/30/219/30/219/30/209/30/20 BankPG2BankPG2 Net Noncore Fund Dependence-10.38-5.115.084.55 Net Loans & Leases to Assets%61.5159.7678.8566.39 Tier One Leverage Ratio%10.599.339.329.31 Total Capital Ratio %16.1015.0112.9614.37 Core Deposit %Page 1086.1280.1282.3275.01 Short-term Non-CoreFunding2.495.066.077.68 Insured Brokered Dep.%1.142.063.093.12 Uninsured Brokered Dep.%1.621.933.172.69 Off Balance Sheet ItemsPage 059/30/219/30/219/30/209/30/20 % Total AssetsBankPG2BankPG2 Off Balance Sheet Items to Assets17.1124.1417.7123.30 Total Loan & Lease Commitments16.6219.8316.9819.24 Assets Securitized or Sold with Recourse0.141.170.201.00 CapitalAnalysisPage 019/30/219/30/219/30/209/30/20 % of Ave.Total AssetsBankPG2BankPG2 Tier One Leverage Ratioequity/assets10.599.339.329.31 Total Capital Ratio (includes other items)16.1015.0112.9614.37 Retained Earnings to Ave. Total Equity18.346.48-71.201.77 Dividends Paid to Net Income1.6440.40-5.2159.74 Page 019/30/219/30/219/30/209/30/20 Growth Rates over Past YearYear %BankPG2BankPG2 Asset GrowthRate2.5210.27-1.4619.69 Growth Rate Tier One Capital16.0010.26-1.139.04 Growth Rate Net Loans & Leases-20.02-1.373.0113.78 Growth Rate Short-term Investments338.4099.55263.50182.90 Growth Rate Short-term Non-CoreFunding-57.99-22.90-33.48-10.44 Interest Rate Risk Analysis9/30/219/30/219/30/209/30/20 Page 09BankPG2BankPG2 Contractual Mat/Reprice Data Loans/Securities over 3 Years Maturity44.5645.2439.2639.62 Liabilities Over 3 year Maturity0.220.660.710.86 Net 3 Year Position44.3343.7438.5538.24 Loans/Securities over 1 year maturity58.2656.1258.3456.25 Liabilities over 1 year maturity1.932.132.663.28 Net 1 Year Position 56.3552.7955.6851.70 As Percent of Assets Total Loans & Securities Over 15 Years3.1811.172.829.90 Loans and Securities 5 to 15 years6.655.672.715.06 Great Western Bank Analysis Assignment Due as a Word File to the Bank Analysis Dropbox in Module 4 before or by April 14thth Assignment: Do a Bank Performance & Risk Analysis for Great Western Bank Due Anytime by April 14th to the “BKAnalDropbox” Overview: At the time of this case in 2021, Great Western Bank’s holding company was Great Western Bancorp, Inc. Great Western Bank is a regional bank headquartered in Sioux Falls, South Dakota in the United States. It has 170 locations in Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. The Bank was established on 08/15/1935, and is currently in Peer Group 2, commercial banks with assets between $10 billion and $100 billion. Great Western Bank has total assets of $12.988 billion. The number of banks in its Peer Group 2 (PG2) for comparison on its Uniform Bank Performance Report (UBPR) is 112 banks. Great Western is primarily a Real Estate Lender with 63.82% of its loans real estate loans, 9.03% agricultural loans, 16.80% commercial & industrial loans, 8.43% municipal loans, 1.41% non-depository and other loans, and just 0.51% loans to individuals (consumer) loans. Later as of Feb. 1, 2022, Great Western Bank was acquired and became a division of First Interstate Bank, a Financial Holding Company headquartered in Billings Montana. The Financial Information for your Analysis from Great Western’s Uniform Bank Performance Reort (UBP$) is posted in Module 4 as an Excel Spreadsheet: “GreatWesternBKUBPR Spreadsheet.xlsx” The tabs on the Spreadsheet (EarningsProfitabilityAnalysis; Burden Analysis, NIM Analysis, Risk Analysis show the information you need for each section of the analysis: Format for Great Western Bank’s Performance & Risk Analysis: I. Introduction: Give a brief introduction about Great Western Bank and the types of loans it makes including the percentages for different types of loans the Bank makes provided in the overview . II. Performance Analysis for 9/30/21 and 9/30/20 (Note all ratios are you need are provided on the Excel spreadsheet under the tab “Earnings and Profitability Analysis”—so no calculations are necessary except for AU, NPM, and EM discussed in “C. Dupont analysis” below). A. OROA Trend Analysis for Great Western Bank. Use the information provided on the spread sheet in the first tab “ Earnings and Profitability Analysis: which is a common size income statement with each item as a % of average total assets. In your analysis, explain why Great Western’s (BANK) OROA improved in 9/30/21 compared to 9/30/20 based on the trends for NIM (including trends in the IR% and IE% and type of funding gap the Bank has), Burden% (including trends in the NIR% and NIE%), and PLL%. B. OROA Peer Comparison for 9/30/21 and for 9/30/20. Explain why the OROA for the Bank versus the PG2 is different each year (including differences in NIM (IR% and IE%), their Burden % (including differences in NIR% and NIE%), and differences in PLL% between the Bank and the PG2 for each respective