Join OSIG! (Contact Prof. Yang) Limited competitive positions available beginning of Spring Term Year long commitment, can take up to 2 credits/term. The deadline for application is April 4. Interviews will be held on the 5th and 6th of April. Become an equities analyst for a nationally recognized value strategy investment team and Manage real $ portfolios. ( % Annualized Return) Trips to NYC, RISE conference, and Portland investment Firms Increase your opportunities for employment, and add to your knowledge of Finance, economics, accounting, and marketing Management and leadership opportunities.

Financial Statements & Institutions

Bank Financial Statements Gup and Kolari: Chp. 3 Statements End Yr. 1 Qtr. 4

Financial Institutions Commercial Banks Investment Banks Savings and Loans Credit Unions Insurance Company Mutual Fund

Commercial Banks “Accept Deposits and Make Loans” But Also FDIC Insured & Fed Regulated Global/International/Money Center Chase Full Service BankAmerica Retail/Consumer Citizens Limited Purpose / Mono-line Credit Cards, Ag Loans

Bank Services Payments Intermediation Other Services Commitments Insurance Securities Trust Other Fin’l Svcs we will discuss

Bank’s Main Activity Maximize Shareholder Wealth By managing Credit, Interest Rate, Liquidity, Operational, Capital and Fraud Risk Subject to constraints from Market Competition, Social structures and Regulatory requirements

FDIC Database of Fin’l Stmts. Click on “Institution Directory” Click on “Find Institution” Click on “Find a Credit Union” Click on “SIC” and see relevant SIC codes (starts with 6021) Go back and fill in State and SIC fields.

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 Interest income Loans and mortgages Securities Federal funds sold Total interest income Service charge income Fees and other income Gross operating income

Income Statement Y3Q3 Operating Expenses Salaries and benefits Interest expenses Interest on deposits Interest on capital notes FRB and fed fund borrowing Total interest paid Provision for loan losses Occupancy expense Business development Other expenses Total operating expenses

Income Statement Y3Q3 Gross operating income Total operating expenses Income before taxes and securities Applicable taxes Gain on securities/loans (after taxes of.000 &.000) Net income Dividend declared3.300 Increase in equity

Balance Sheet Assets Cash and due from banks Federal funds sold Investment securities Treasury bills U.S. Government notes State and muni securities Total securities

Balance Sheet Loans and mortgages (less provision for loan losses) Bank premises less depreciation ( & ) Other assets Total assets

Balance Sheet Liabilities and equities Demand deposits Time deposits Total deposits Federal funds purchased Funds borrowed from FRB.000 Dividend payable3.300 Accrued taxes Other liabilities Total liabilities

Balance Sheet Capital notes and equity Capital notes Common stock ($10.00 par Issued:3.000 & million) Surplus Retained Earnings Total equity * Total liability & capital * Total qualifying capital FRB capital adequacy ratio

Analysis #1: Spread Spread = [NII / Assets] * 4 (Roughly) NII = – = ( Net Interest Income = Total Interest Income – Total Interest Expense ) Spread = [ / ] * 4 = 3.85%

Observations about Y1Q4 Gross income up, but expenses up slightly more, so overall net was down from Y1Q3. Quick review shows: Securities up more than Loans up. Funding from added Deposits and loans from other banks (Fed Funds Purch’d).