2024 Journal of Community Bank Case Studies

Executive Summaries

Commonwealth University of Pennsylvania Executive Summary

2023 was a tumultuous year for the banking industry due to the closures of Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank. These large banks failed due to copious uninsured deposits and insufficient liquidity. Following the bank closures, regulators are increasingly concerned with the risks associated with liquidity planning, capital planning, and asset and liability management (ALM). In the aftermath of the closures, deposits at community banks remained more stable than at large banks. As the Federal Reserve System explains, community banks are highly resilient because they link deposits to customer relationships (Bowman 1). First Citizens Community Bank (FCCB) is a prime example of a bank that puts its customers first. FCCB is attentive to customer needs through social media, and the bank serves a wide variety of customers in the bank’s demographic region. The bank specializes in agricultural lending and is considered a leading lender nationwide for

loans to farmers. In times of instability, FCCB relies heavily on the relationships it forms with customers to ensure the institution’s financial prosperity. The bank’s management notes this relationship-centered business model as a key contributor to FCCB’s success. Part I of this case study analyzes the financial performance of FCCB using call reports from the Federal Financial Institution Examination Council (FFIEC) and SEC 10-K report data for its bank holding company (BHC), Citizens Financial Services, Inc (CZFS). Specifically, we examine FCCB’s earnings performance, asset growth, loan portfolio composition, liquidity, and capital levels over the past five years. FCCB grew notably over the period by expanding into Delaware through the acquisitions of MidCoast and Huntington Valley Bancorp. Part II of this case study analyzes the current state of the banking industry in the aftermath of the 2023 bank closures, contrasting FCCB

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