2023 Community Bank Case Study Competition Journal

FIRST PLACE: The University of Tennessee at Martin

was granted trust powers, and changed its name to Commercial Bank and Trust Company (Our Story, CBTC Website). Over the course of the next 60 years, CBTC continued to grow in the Henry County market by opening additional locations and purchasing Peoples Bank and Trust Company of Henry. In November 1983, the bank was purchased by R. Molitor Ford Sr. and WilliamW. Deupree, Jr. Ford and Deupree developed a vision of strong relationships and exceptional client service in the banking industry (Our Story, CBTC Website). The current bank has expanded to nine locations spread throughout Henry, Obion, Madison, and Shelby Counties in Tennessee and is operated by more than 200 employees who call CBTC home (Davis et al., March 29, 2023). CBTC has experienced success throughout the years by implementing multiple diverse revenue streams, managing succession planning exceptionally well, and enjoying multiple technological advancements over the past five years. Additionally, these accomplishments have allowed CBTC to grow to over $1 billion in assets during 2021 (FFIEC n. p.). Part One: Financial Analysis of Commercial Bank and Trust Company Earnings Performance Net interest income of CBTC has grown 15.6% over the past five years with an 11.2% growth between 2021 and 2022. This jump in growth is due to a 29.3% growth in investment interest

The current bank has expanded to nine locations spread throughout Henry, Obion, Madison, and Shelby Counties in Tennessee and is operated by more than 200 employees who call CBTC home (Davis et al., March 29, 2023)

income in the same period. Over the past five years, investment interest income has grown 65.8%. This revenue growth occurred due to increases in CBTC’s investment portfolio. Customer deposit balances and cash increased due to COVID-19 stimulus packages. Without a corresponding increase in loan demand, the bank used these excess reserves to invest in low-risk securities such as municipal and agency-backed bonds (Stoots, personal communication, April 1, 2023). Interest expense has seen a 20.2% growth for the past five years with significant changes between each year. Between 2018 and 2019 interest expenses increased 75.6%, then decreased 36.9% in 2020, and decreased another 35.6% in 2021. After 2021 interest expense increased 69.4%. While net interest income is still approximately 5.8 and 13.9 times larger than interest expense, the erratic changes make forecasting a bit more

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