2023 Community Bank Case Study Competition Journal

FIRST PLACE: The University of Tennessee at Martin

and pay no federal income tax, which means CBTC only pays state excise and franchise tax of 6.5% net income, saving millions of dollars in taxes. Loan Portfolio Composition CBTC has maintained a rather well-balanced loan portfolio over the last five years (Figure 2).

Although CBTC has less concentration in real estate loans than its peer group, it has a higher percentage of agricultural and commercial loans than its peer group. Real estate loans remain the largest component of the portfolio averaging 68.1% of total net loans and leases. Commercial loans make up the second largest component of the portfolio, averaging 20.7% of total net loans and leases. Individual, agricultural, and

other loans round out the portfolio coming in at 5.7%, 2.5%, and 3.0%, respectively. Commercial loans increased 51.3% as a percentage of the total loan portfolio from 2019 to 2020 due to CBTC issuing 764 PPP loans totaling $72.9 million. The bank issued another 740 PPP loans in 2021 totaling $30.5 million. The Commercial loan percentage is trending toward the pre-pandemic numbers now since all but one of the PPP loans have been paid off or forgiven. The one remaining loan is on track to be satisfied by 2026. Asset Growth CBTC experienced persistent asset growth from year end 2018 to year end 2021 (Figure 3).

Figure 2: Loan Portfolio Composition of CBTC from 2018 – 2022

2018

2019

2020

Year

2021

2022

0%

20%

40%

60%

80%

100%

Percent of Loan Portfolio

Real Estate Loans Agricultural Loans

Commercial Loans Individual Loans

Other Loans & Leases

Figure 3: CBTC Total Asset Growth from Past Five Years

1,400,000

1,157,694

1,200,000

1,062,292

999,777

1,000,000

812,750

740,176

800,000

600,000

400,000 Assets In $1,000s

200,000

0

2018

2019

2020

2021

2022

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