2024 Journal of Community Bank Case Studies

2024 COMMUNITY BANK CASE STUDY COMPETITION

According to Jude Melville (President and CEO), growing owner-occupied real estate and C&I loans are crucial for managing risk when interest rates shift (Melville, et al, personal interview, 21 Mar. 2024). Owner-occupied properties presuppose less risk than non

Figure 2: Securities as a Total Percentage of Assets

B1Bank

Silicon Valley Bank

First Republic Bank

Signature Bank

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

2018

2019

2020

2021

2022

Loan Portfolio Composition The 2018 call report shows the investment in real estate and C&I loans consisted of 91.54% of the total loan portfolio and grew to 95.14% in 2022. b1Bank allocated more investment in the community within the five-year time period and increased its reliance on real estate and C&I loans for interest income.

owner-occupied properties, while C&I loans, backed by diverse business assets, offer more flexible repayment terms. The diverse mix of loans helps b1Bank mitigate risks tied to interest rate fluctuations. Earnings Performance From 2018 to 2022, b1Bank’s net income grew 274%, increasing from $16.9 million to $63.4 million, and contributed to an improvement in the Return on Assets (ROA) from 1.02% to 1.15%. Compared to the failed banks, b1Bank’s efficiency in generating both interest and noninterest income helped increase ROA. According to Greg Robertson (CFO), b1Bank generates interest from loans and expands its subsidiaries’ investment advisory services–Smith Shellnut Wilson–to generate consulting revenue (Robertson, personal interview, 21 Mar 2024). A two-pronged approach to b1Bank’s business strategy diversifies revenue and mitigates the impact of volatile interest rates.

Figure 3: b1 Bank Loan Portfolio in 2022

1.13%

Individual Loans

Farm Loans

0.73%

3.00%

Other Loans

C&I Loans

73.81% Real Estate Loans

21.34%

46