Bank FinancialStatements

Bank Financial Statements

Gup and Kolari: Chp. 3

Statements End Yr. 1 Qtr. 4

Balance SheetProduction/ Financial

Service Firm Services

ASSETS ASSETS

Cash Small Cash Small

Accts. Rec. Medium Investments Medium

Inventory Medium Loans LARGE

Fixed Assets Large Premises Small

Liabs/OE Liabs/OE

Accts. Pay. Medium Deposits Large

L/T Debt Large Savings Large

Owner's Eq Large Other Borr’gs Medium

Capital Tiny

Income Statement

Production/ Svc. Financial Services

Sales Total Interest Income

- COGS - Total Interest Expense

= Gross Margin = Net Interest Income

- Optg Exp + Non-Interest Income

= EBIT - Non-Interest Expense

- Interest Exp - Provision for Loan Losses

= EBT = Pre-tax Optg Income

- Tax +/- Securities Gains/Losses

= Net Income - Income Taxes

+/- Extraordinary Items

= Net Income

FDIC Database of Fin’l Stmts.

http://www.fdic.gov/bank/statistical/index.html

Click on “Institution Directory”Click on “Find Institution”

EDGARSCAN…… http://edgarscan.pwcglobal.com/servlets/edgarscan

Benchmarking Assistant

First off….

Let’s understand what we’ve been given before we even think about where we’re going…..

Let’s concentrate on the statement in your packet: Yr. 1 Qtr. 4

Income Statement Y1Q4

Operating Income 1.4 1.3

Interest income

Loans and mortgages 87.529 85.224

Securities 18.511 15.199

Federal funds sold 0.000 1.648

Total interest income 106.040 102.071

Service charge income 4.619 4.41

Fees and other income 21.224 21.058

Gross operating income 131.882 127.538

Income Statement Y1Q4

Operating ExpensesSalaries and benefits 16.777 16.473

Interest expensesInterest on deposits 56.849 54.249Interest on capital notes 0.909 0.923FRB and fed fund borrowing 1.147 0.000Total interest paid 58.905 55.173

Provision for loan losses 7.279 7.224Occupancy expense 4.044 3.937Business development 3.100 3.000Other expenses 22.503 22.188Total operating expenses 112.608 107.994

Income Statement Y1Q4

Gross operating income 131.882 127.538Total operating expenses 112.608 107.994

Income before taxes and securities 19.274 19.545

Applicable taxes 6.268 6.794

Gain on securities/loans(after taxes of .349 & 1.452) 0.378 1.573Net income 13.384 14.324Dividend declared 3.3 3.3Increase in equity 10.084 11.024

Balance Sheet

Assets 1.4 1.3

Cash and due from banks 359.254 375.696

Federal funds sold 0.000 88.776

Investment securities

Treasury bills 260.000 204.345

U.S. Government notes 384.892 320.024

State and muni securities 406.290 356.099

Total securities 1051.182 880.468

Balance Sheet

1.4 1.3

Loans and mortgages 3472.557 3444.479(less provision for loan

losses) 22.951 22.683

Bank premises

less depreciation (26.030 & 24.559)

26.921 26.185

Other assets 10.457 10.77

Total assets 4897.419 4803.693

Balance Sheet

Liabilities and equities 1.4 1.3Demand deposits 1551.705 1588.917Time deposits 2951.798 2883.289Total deposits 4503.503 4472.206

Federal funds purchased 54.933 0.000Funds borrowed from FRB 0.000 0.000Dividend payable 3.300 3.300Accrued taxes 7.791 9.399Other liabilities 39.570 39.440Total liabilities 4609.097 4524.345

Balance Sheet

Capital notes and equity 1.4 1.3Capital notes 38.457 39.077Common stock ($10.00 par 30 30

Issued:3.000 & 3.000 million)Surplus 48.519 48.519Retained Earnings 171.346 161.752Total equity * 249.865 240.271Total liability & capital 4897.419 4803.693

* Total qualifying capital 299.797 290.689FRB capital adequacy ratio 0.967 0.941

Analysis #1: Spread

Spread = NII / Assets * 4 (Roughly)

NII = 106.040 – 58.905 = 47.135 (Net Interest Income = Total Interest Income – Total Interest Expense)

Spread = 47.135 / 4897.419 * 4 = 3.84%

Observations about Y1Q4

Interest income up, but expenses up more so overall net was down from Y1Q3.

Quick review shows Fed Fund sales (income) became Fed Fund borrowing (expense), although there was added income from securities investment.