3. Its 2014, and you have newly joined Fidelity as an analyst for its financial institutions investment fund. Your boss has asked you to provide a preliminary assessment of how a money center bank (MCB) in your portfolio is performing, based on how it performed in 2010 versus 2013. The balance sheet and income statement information is below; please do the following:

1. Calculate MCBs financial ratios, using the equity framework, by filling in the grid below. Include your assessment of how it is doing in 2013 versus 2010 on each ratio.
2. What is your overall assessment of how the bank is doing and what might some reasons for this be?
3. What ongoing concerns might you have that you would want to analyze further and/or discuss further with MCB management?

MCB: Balance Sheet - ($MMs)
	12/31/10	12/31/13
Assets
Cash & Reserves	$152,682	$149,482
Investment Securities	$442,878	$445,053
Loans, Net	$922,619	$889,794
Fixed & Other Assets	$269,427	$182,112
Total Assets	$1,787,606	$1,666,441
Liabilities & Equity
Demand deposits	$108,229	$144,560
Interest bearing deposits	$989,340	$1,111,803
Borrowed Funds	$424,750	$176,468
Other Liabilities	$44,665	$27,952
Total Liabilities	$1,566,984	$1,460,783
Equity	$220,622	$205,658
Total Liab. & Equity	$1,787,606	$1,666,441
MCB: Income Statement ($MMs)
Interest Income	2010	2013
From Loans	$54,545	$37,972
From Investments	$14,006	$12,224
Total Interest Income	$68,551	$50,196
Interest Expense
On Deposits	$4,513	$1,884
On Other Borrowings	$5,808	$1,676
Total Interest Expense	$10,321	$3,560
Net Interest Income	$58,230	$46,636
Provision for Loan Losses	$34,707	$6,864
Noninterest income	$32,832	$44,900
Noninterest expense	$41,929	$46,828
Income Before Tax	$14,426	$37,844
Tax Expense	$4,435	$12,732
Net Income	$9,991	$25,112

MCB Financial Ratios ($ in MM)	2010	2013	Assessment
Interest Income
Noninterest Income
Operating Income
Earning assets
Interest-bearing liabilities
ROE
ROA
Profit Margin
Interest Expense Ratio
Provision for Loan Loss Ratio
Noninterest Expense Ratio
Tax Ratio
Asset Utilization
Interest Income/Total Assets
Noninterest Income/Total Assets
Equity Multiplier
Net interest margin
Spread