Rubric Failed Bank Analysis

Total points 25
80 percent of points (20) come from written work and remaining points (5.0) comes
from class presentation

Instructions for information to be included in the paper. (1 point)

Your analysis covers the period 4th quarter 2006 to the last quarterly financial
information reported by the failed bank. You should pick a failed bank with $300
million or more in total assets. It should be at least 7 years old at the end of 2006.
https://www.fdic.gov/bank/individual/failed/banklist.html
You will pick another bank with similar structural information that currently remains
in operation. It should come from the same peer group as your failed bank. You will
include this banks information in your paper as well. The information for this and
your failed bank can be obtained from the Uniform Bank Performance Report cover
page. https://cdr.ffiec.gov/public/ManageFacsimiles.aspx
Other selection criteria include: 1. Charter dates; 2. charter classes (national or
state charter); 3. main office locations; 4. & 5. number of branches (12/31/2006,
and as of failed date)for both banks; 6. branch locations relative to main office for
both banks; 7. ownership structure (bank holding company or not); 8. BHC owner is
a one bank or multibank company for both banks, bank holding company
acquisitions date for both banks, 10. If owned by a multibank company, status of
other bank subsidiaries (failed bank).
You will compared your results with provisions of any supervisory actions placed on
the failed bank and conclusion drawn the FDIC Office of the Inspector General.
Introduction (1 point)
Your study will with begin a brief introduction that states the purpose of the study
and why you are undertaking it. It should put forward a hypothesis e.g., financial
ratios didnt reveal the reasons why one bank survived the economic downturn late
in the first decade of the new millennium and the other didnt.
It will describe the banks picked for the study and the criteria for picking them. It
will set out the study methodology -- comparative analysis of similar banks that
experienced different financial outcomes during the last recession
The outline of the study that follows completes the section.

The banks (1 point)

Your analysis will include a brief comparative summary of the banks charter
(national, state) date, location state and city of main office; ownership structure
(bank holding company, independent), and offices operated (hereafter referred to as
structure information). It will state the reason for the matching of characteristics -comparability.
Financial Performance (14 points)
(1 of 14 point)
The next section of your paper will focus on financial performance of the two banks.
It starts with an outline of the banks selected. Highlight the point that banks were
similar but were managed differently.
(1 of 14 points)
It describes where the banks stood at December 2006 before the economic
downturn began. You can use ratios from the diagnostic dozens or others of your
choosing to compare the performance of the failed and survivor banks. At a
minimum, you should report information on earnings before income taxes (EBIT),
net interest income, efficiency ratio, coverage ratio, noncurrent loans to loans, net
noncore dependence ratio, and equity capital to assets ratio. The information
presented should include ratio values for each bank and each banks ranking within
its peer group for the ratio.
(1 of 14 points)
The section also tracks the quarterly progression of ratio changes as financial
deterioration of the bank progressed toward failure. The failed bank performance
over time will be compared and contrasted with the viable bank.
(5 of 14 points)
The section will then analyze the factors that led to differences in financial ratios
reported by the banks. This a look behind the numbers describing what happened to
generate ratio values. (It is not a description of the up and down ratio movements
but why the ratio values moved up or own. For example, were the ratio differences
related to asset concentrations, funding sources, poor underwriting practices,
nonearning assets, etc.)
(3 of 14 points)
The section will identify any formal supervisory actions taken by the failed banks
primary federal bank supervisor. It will review provisions of the action look to see if
the supervisors concern dealt with matters similar to what you found in your
analysis.
(3 of 14 points )
The section will end summary conclusions drawn from the analysis. These will be
compared with the conclusions reached by the banking agency Office of Inspector
General. FDIC OIG https://www.fdicig.gov/mlr.shtml.
OCC OIG
http://search.treasury.gov/search?
affiliate=treasury&commit=Search&query=material%20loss%20reviews. FED OIG
http://search.newyorkfed.org/oig_search/search?text=material+loss+reviews

Helpful web site that offers a summary of factors found instrumental in bank failures
based on readings of OIG material loss reviews.
https://www.csbs.org/regulatory/resources/Pages/Material-Loss-Reviews.aspx
Note: Your presentation of information should make use of appropriate tables and
graphs and any statistical analysis you feel appropriate.
Readability, structure, and Grammar: (3 points, point for each of the six
items listed)
1. Is it readable? Does it flow? Is it more than a series of disjointed paragraphs?
2. Are key points presented clearly, identified as such, and are they supported
by fact?
3. Did the analysis include chart, graphs, and/or table and that were used to
demonstrate/ clarify points made in the text?
4. Does the analysis follow a logical path, and does the analysis support the
conclusions drawn?
5. Are any references cited?
6. Basic grammar: Is there Subject/verb agreement? Is use of passive voice
minimal? Etc.