2023 Community Bank Case Study Competition Journal

FIRST PLACE: The University of Tennessee at Martin

Figure 6: CBTC Tier 1 Capital Ratio vs Peer Group 4

(Konrad n. p.). CBTC’s uninsured deposits consist of 31.0% (Stoots, personal communication, April 1, 2023). CBTC has diversified its deposits in four different markets: Obion County, Henry County, Madison County, and Shelby County. In 2022, CBTC had the second largest market share in both Obion (22.6%) and Henry County (32.1%)

10.0% 12.0% 14.0% 16.0% 18.0%

0.0% 2.0% 4.0% 6.0% 8.0%

CBTC PG 5 CBTC PG 5 CBTC PG 5 CBTC PG 4 CBTC PG 4

2018

2019

2020

2021

2022

Liquidity Liquidity is an important topic in today’s banking environment due to the recent run and subsequent failure of Silicon Valley Bank (SVB). Financial stocks lost significant value in mid March of 2023, and the President of the United States attempted to calm the country. Unlike Silicon Valley Bank, CBTC is very conservative. CBTC maintains reserves within a range of 8.5% and 10.0% of total assets including its interest bearing bank balances, federal funds sold, non interest cash, and cash due from banks (FFIEC n. p.). The bank also maintains contingency funds with lines of credit from correspondent banks, the Federal Home Loan Bank, and as a last resort, the Federal Reserve Discount Window. Currently, CBTC is not using any of these lines of credit. Another difference between SVB and CBTC is the percentage of uninsured customers. According to Forbes, more than 93.0% of SVB’s deposits were uninsured

with only a 1.0% difference between CBTC and the next competitor. The bank was seventh in Madison County with 6.0% and fifteenth in Shelby County with 1.2% (Stoots). While CBTC does not have significant market share in these two counties, they are significantly larger markets, so they do have significant deposits in these areas (Figure 7).

Figure 7: CBTC Deposits by Market

16.5%

36.3%

31.3%

15.9%

Obion

Henry

Madison

Shelby

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