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CASE STUDY (PART 1) INSTRUCTIONS
Due February 26, 2024
The following articulates the overall basic procedure and presentation details for the FIRST PART
of the case for the semester.
PURPOSE
The purpose behind this study is: (1) help you develop a strong awareness of the financial
structure of depository financial institutions; (2) further your financial analysis skills; and (3)
broaden your understanding of the risks and strengths inherent in a depository institutions in the
United States.
PROCEDURE
There will be a total of three parts to this study. You will be randomly assigned a bank. It is your
task to analyze the financial structure of each company provided. Analysis consists of an Excel
analysis. When submitted, it should contain, as a minimum, the following:
 Excel Spreadsheet – 2 years of data to be obtained from SEC/Edgar and/or FDIC.gov since these
are the primary sources for financial data. In other words, don’t necessarily trust Yahoo! Finance
or MSN Money. Or, go directly to the source: SEARCH THE BANK’S WEBSITE AND LOOK FOR
ANNUAL REPORTS AND DOWNLOAD
o Calculate the Financial Institution’s:
 ROE and ROA
 Equity Multiplier
 Profit Margin (net income/total operating income), plus these detailed sub-ratios:
 interest income/total operating income,
 provision for loan loss/total operating income,
 non-interest expense/total operating income, and
 Asset Utilization (total operating income/total assets), plus these sub-ratios:
 interest income/total assets and
 total income/total assets
You are free to use other ratios and analysis techniques (i.e., DuPont Analysis) but only if you feel they are
important in making a point in either your analysis or conclusions. Don’t add them just to impress me; I
won’t be impressed.
SUBMIT ELECTRONICALLY TO CANVAS.

 

📌 Struggling with where to start this assignment? Follow this guide to tackle your assignment easily!

This case study requires you to analyze the financial structure of a depository financial institution by using real financial data. Follow these steps to ensure you complete Part 1 successfully.

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📖 Step-by-Step Guide for Completing the Assignment

1. Collect Financial Data (Start Here!)

🔍 Find the bank’s financial reports:

• Primary sources: SEC/Edgar (https://www.sec.gov/edgar/searchedgar/companysearch.html) and FDIC.gov (https://www.fdic.gov)
• Search annual reports on the bank’s official website.
• Avoid using Yahoo! Finance or MSN Money unless verifying trends.

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2. Create an Excel Spreadsheet with 2 Years of Data

💾 Organize the financial figures for two consecutive years in Excel. Ensure all calculations are based on real data.

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3. Calculate Required Financial Ratios

📊 Use the following formulas to analyze the bank’s financial health:

🔹 Profitability Ratios

1. Return on Equity (ROE) = Net Income / Shareholder’s Equity
2. Return on Assets (ROA) = Net Income / Total Assets
3. Equity Multiplier = Total Assets / Shareholder’s Equity

🔹 Profit Margin & Sub-Ratios

4. Profit Margin = Net Income / Total Operating Income
   • Interest Income Ratio = Interest Income / Total Operating Income
   • Provision for Loan Loss Ratio = Provision for Loan Loss / Total Operating Income
   • Non-Interest Expense Ratio = Non-Interest Expense / Total Operating Income

🔹 Asset Utilization & Sub-Ratios

5. Asset Utilization = Total Operating Income / Total Assets
   • Interest Income to Assets = Interest Income / Total Assets
   • Total Income to Assets = Total Income / Total Assets

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4. Optional: Additional Analysis (If Needed)

📌 Consider a DuPont Analysis if you want to examine ROE in more depth:

• ROE = Profit Margin × Asset Turnover × Equity Multiplier

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5. Format & Submit Your Work

✅ Ensure your Excel sheet includes:
✔ Clearly labeled financial data for two years
✔ All required ratios calculated correctly
✔ A neat and organized format

📤 Submit electronically to Canvas by the due date.

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Following these steps will help you efficiently complete your case study and ensure accurate financial analysis. 🚀💼 Let me know if you need further assistance! 😊

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