Case 75: Federal Bank Solution
INPUT DATA: Amount Needed to Raise Flotation Costs Stock Offer Price Market Value/Book Value Ratio (Dollars in thousands) Assets Cash U.S. Treasuries Mortgage-backed Securities Municipal Bonds Government Agency Securities Total Cash & Securities Residential Mortgage Loans Consumer Loans Business Loans Total Loans Fixed Assets Total Assets Liabilities Passbook Savings Non-interest Checking N.O.W. Accounts Money Market Accounts Certiﬁcate of Deposits Total Savings Borrowed Money Other Liabilities Total Liabilities Capital Stock ($100 par value) Retained Earnings Total Equity Total Claims Loan Loss Reserve Allowable Risk Adjustment Weights: No default risk Low default risk Res. loans & …show more content…
Maryland Financial Great Northern Bank First Bank of Calif. Omaha Federal Federal Finance
ROA 1.51% 1.30% 0.90% 1.49% 1.50%
e. Federal Finance’s Capital Asset Ratio is slightly lower than that of First Bank of California. Omaha Federal and Maryland Financial have much higher capital asset ratios and are less risky. Great Northern’s capital asset ratio falls below the threshold for a well-capitalized institution. Federal Finance’s growth rate is greater than First Bank of California and similar to Omaha Federal, but below Great Northern Bank and Maryland Federal 4. Considering your answers to Questions 1 through 3: a.