2020 Journal of Community Bank Studies

2020 COMMUNITY BANK CASE STUDY COMPETITION

growth over the last several years in dollar terms regarding lending in the past five years. Since 2015, real estate lending has grown 23.42% and has shown to be a significant portion of the overall growth of CNB. The peer group consisted of financial institutions ranging from $1.18 billion to $1.68 billion in assets. Providing a range of $500 million allowed for accurate comparison and evaluation of the loan portfolio of similar size banks, which is particularly important for portfolio composition. The portfolio breakdown of the peer group is very similar to Citizens National Bank. After further analysis, we see the growing trend in real estate lending. According to Freddie Mac, since 2018, the average fixed 30-year and fixed 15-year mortgage rates have

so without any mergers or acquisitions. We can compare the growth rate of CNB to that of the peer group which grew total assets by 35.61%, but 70 of the 176 institutions grew with at least one acquisition. The growth in total assets of CNB was similar to the trend in the growth of earning assets (Net Loans and Leases plus Investment Securities) which grew 19.71%, about $221 million, over the same period. The bank’s growth in earning assets contributed to just over 94% of all asset growth over the 5-year period. This was slightly larger than that of the peer group, whose earning assets contributed to just under 92% of asset growth between 2015 and 2019. As Mr. Stringer (CFO) said, this growth can be broken down into two timeframes. The first

steadily been declining. The cost of borrowing for customers has steadily declined, and you can see they are utilizing this time to continue to borrow. Asset Growth Between 2015 and 2019, the bank saw a 19.56% growth in their total assets from $1.198 billion to $1.432 billion. This translates to a year-over-year growth of about 4.63% for the bank. Its growth in assets was completely organic, meaning that it was done

CNB Asset Growth vs. Peer Group

PG Growth % CNB Growth %

7.79%

2016

9.80%

7.99%

2017

1.22%

7.50%

Year

2018

1.33%

8.37%

2019

6.17%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00%

Percentage

CNB Earning Assets vs. Non-Earning Assets ($ in 000’s)

2015

2016

2017

2018

2019

Earning Assets

$1,122,819 $1,238,475 $1,254,119

$1,273,125 $1,344,124

Non-Earning Assets

$75,260

$76,992

$77,374

$76,036

$88,323

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