2019 Journal of Community Bank Case Studies

2019 COMMUNITY BANK CASE STUDY COMPETITION

Exhibit 1: FirstBank Net Income (In Thousands)

FirstBank has determined a set of six values that are important to the company, including: “One Team. One Bank.”, do the right thing, commitment to excellence, treat people with respect, enjoy life, and exist for the customers (Holmes). Through its customer focus and local strategy, FirstBank perfectly represents a community bank. Patrons trust FirstBank and the smiles from employees whether from the teller at the drive-through window, the loan officer who is providing funding for a new home, or the market president at a local sporting event. Financial Analysis A. Earnings Performance FirstBank has experienced steady earnings growth over the last few years. The bank had net income of $82.1 million in 2018, ranking as its highest net income in the last five

$100K

$80K

$60K

$40K

Net Income

$20K

$0

2014

2015

2016

2017

2018

Year

Exhibit 2: ROAA of FirstBank compared to Peer Group

FirstBank Banks in Peer Group ($1 Billion-$3 Billion in Assets in 2014-2015/$3 Billion-$10 Billion 2016-2018

2.00%

1.69%

1.52%

1.46%

1.34%

1.21%

1.05%

0.99%

1.0%

0.91% 0.99%

1.00%

Percentage

0.00%

2014

2015

2016

2017

2018

Year

C. FirstBank’s Community Banking Model When asked to define a community bank, Chris Holmes, FirstBank’s CEO, explained that the size of the bank does not matter; how a bank’s staff treats people is the attribute that defines a community bank. The quality of customer service the bank provides is the basis for its community impact. As FirstBank continues to grow, it plans to remain true to its community bank model by continually evaluating and monitoring changes in customer needs and desires. FirstBank’s mission is defined as, “Helping people build a better future” (Holmes).

years (see Exhibit 1). From 2017 to 2018, the bank experienced net income growth of 37.75%. This growth is primarily due to recent acquisitions, organic growth within the bank, and tax reform. FirstBank also has an exceptional Return on Average Assets (ROAA) compared to its current peer group of banks with $3 billion to $10 billion in assets (“UBPR Peer Group”). Although FirstBank has increased assets by 111.54% in the last five years, the ROAA through year-end 2018 was 1.69%, as Exhibit 2 presents. FirstBank’s ROAA surpasses the industry average by 35 basis points (“UBPR Peer Group”).

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