Assignment $2$

RSSD$-$ID of assigned bank $=$

In this assignment, you are asked to compare a community bank with offices in the Kansas City market to a megabank, JP Morgan Chase. There are $40$ questions, each of which is worth $2\mathrm{.}5$ points. Answer each question for the bank assigned to you. The module for the assignment has instructions for how to get the data and relevant information for JP Morgan Chase. For several questions, you will also need to consult the following two articles, which are also on the reading list for Unit $8$:

DeYoung, $$Banking in the United States,$$ Oxford Handbook of Banking, $2009,$ pp$.786-790($A Stylized View of Banking Strategies$)($Clicking on the link will take you to the eBook on the library website. The article is Ch$.31$ in Section V of the book.$)$

Adams$-$Kane, $$Commercial Real Estate: How Vulnerable are U$.$S$.$ Banks,$$ Milken Institute, July $2018,$ pp$.3-8($Background$)$

Section I. Bank structure and size

For Q$1-$Q$5$ below, see the instructions for getting information on organization structure.

Q$1$ What is the bank$$s name and where is it headquartered?

The bank's name is Country Club Bank, and it is headquartered in Kansas City, Missouri, United States.

Q$2$ Does the bank have a top holding company? If so$,$ what is its name and is it a one$-$bank holding company $($OBHC$)$ or a multibank holding company $($MBHC$)?$

Country Club Bank operates under a top holding company named Country Club Financial Services, Inc. It is a multibank holding company $($MBHC$).$

Q$3$ What type of entity is the bank $($national bank, member bank, or nonmember bank$)?$

Country Club Bank is a member bank.

Q$4$ Based on your answer to the previous question, which federal regulator supervises the bank$$the Fed, the FDIC, or the OCC?

As a member bank, Country Club Bank is supervised by the Federal Reserve $($the Fed$).$

Q$5$ Does the holding company or the bank itself have any nonbank subsidiaries? $($These are entities such as Domestic Entity Other that are not banks or holding companies and are listed with either a bank or holding company as parent.$)$ If so$,$ how many?

For Q$6-$Q$7$ below, see the instructions on getting call report data and the appendix to this assignment. Make sure to use the call report for $12/31/2022.$

Q$6$ How many employees does the bank have?

$404$

Q$7$ What are the bank$$s total assets in thousands of dollars?

the bank's total assets are $$191,658,000.$

Q$8$ Based on your answer to the previous question, does the bank meet the common definition of a community bank as one with less than $$10$ billion in assets? Yes or no$?$

Yes. Based on the total assets of Country Club Bank, which are $$191,658,000,$ the bank meets the common definition of a community bank as one with less than $$10$ billion in assets.

For Q$09-$Q$10$ below, see the instructions on getting office data. Remember to use the data for $6/30/2023.$

Q$9$ How many offices did the bank have on $6/30/2023?$

$24$

Q$10$ In how many states did the bank have offices on $6/30/23?$ What were those states?

On June $30,2023,$ Country Club Bank had offices in two states: Kansas and Missouri.

Q$11$ Based on your answer to the previous question alone $($i$.$e$.,$ ignoring all other factors$),$ how would you expect the risk of insolvency for the bank to compare to that of JP Morgan Chase? Would it be higher or lower?

regarding the number of states in which Country Club Bank operates compared to JP Morgan Chase, it's reasonable to infer that the risk of insolvency for Country Club Bank may be lower than that of JP Morgan Chase. Operating in fewer states typically implies a smaller scale of operations and potentially lower exposure to regional economic fluctuations and regulatory challenges compared to larger, more diversified banks like JP Morgan Chase. However, it's essential to consider various other factors such as asset quality, capitalization, and overall financial health to make a comprehensive assessment of insolvency risk.

For the questions in Section II$-$V below, see the instructions on getting call report data and the appendix to this assignment. Remember to use the call report for $12/31/2022.$

Section II$.$ Bank portfolio composition

Q$12$ What is the percent share of small business loans in the bank$$s total assets? $($Show the calculation$$i$.$e$..,$ the numerator and denominator of the ratio.

Q$13$ How does the bank$$s percent share of small business loans compare to that of JP Morgan Chase? Is it higher or lower?

Q$14$ Is your answer to the previous question consistent with what DeYoung says about the relative importance of small business loans to small and large banks on p$.786?$ Yes or no$?$

Q$15$ What is the percent share of large business loans in the bank$$s total assets? $($Show the calculation$--$i$.$e$..,$ the numerator and denominator of the ratio.$)$

Q$16$ How does the bank$$s percent share of large business loans compare to that of JP Morgan? Is it higher or lower?