2020 Journal of Community Bank Studies

THIRD PLACE: Mansfield University of Pennsylvania

Figure 6: Net Loans to Deposits (in thousands)

asset prices are discounted. Although the bank has been profitable in recent years, its approach remains conservative to ensure it can properly serve its constituents without placing them in jeopardy. Liquidity At C&N, both net loans and deposits have increased in the last five years. The sudden increase in loans in 2019 is the result of the acquisition, as the acquired bank had more loans than deposits. As shown in Figure 6, liquidity risk rose, but it is still at a comfortable level for the bank. As opportunities for new acquisitions arise in the future, the bank can take advantage of such opportunities. Naturally, deposit growth is the primary strategy in 2020. Total Equity/Total Asset ratio decreased until 2017, then suddenly increased in 2018, and finally decreased again in 2019. The behavior is similar to net income. The change in 2017 and the tax act can explain the change in

Loans, Net

Deposits

$1,400,000

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0

2016

2015

2017

2018

2019

Year

Figure 7: Capital Adequacy (Total Equity Divided by Total Asset, by percentage)

15.4% 15.3% 15.2% 15.1% 15.0% 14.9% 14.8% 14.7% 14.6% 14.5%

2015

2016

2017

2018

2019

Year

Part II: Bank Secrecy Act and Anti- Money Laundering Act Compliance Assessment Process, Methods, and Structure The Bank Secrecy Act and anti-money laundering regulations pose the same basic rules and regulations for all banks in the United States. However, larger banks may be exposed to a higher risk of financial crimes because they

2018, and how the acquisition impacted 2019. The higher level of debt is certainly concerning in a time of economic contraction. However, it is crucial to note the bank has a sufficiently high level of liquidity and outstanding capital to the risk-weighted assets ratio, shown in Figure 7. Such a conservative level will allow the bank to endure the time of turmoil and seek opportunities that arise when the market feels squeezed and must be more efficient.

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