FINANCE PROJECT

 

analyze, evaluate, and create a Microsoft Word digital report comparing two South Florida Community Banks for five-year (5) period ending December 31, 2020. As you complete your research and begin writing the report.

GUIDELINES AND EXAMPLE ATTACHED.

Guidelines

for Writing the Research Report

A FIN 4324 course requirement is to analyze, evaluate, and create a Microsoft Word digital report comparing two South Florida Community Banks for five-year (5) period ending December 31,

2020

. As you complete your research and begin writing the report, please follow these guidelines:

1. All figures must be current, which means obtaining from the FDIC/FFIEC website (

https://www.fdic.gov/

) all financial information for both banks. The information may be found by clicking on the

Researchers and Analysts

tab, the 5th tab under Quick Links (left side of page) and

then on the next page Uniform Bank Performance (under Data and Statistics (middle column top, 2nd tab.)

2. Refer to the research report format below. Wherever it states Financial Institution A and B, it means that you insert the actual names of both institutions. Do not use these letters in your report.

3. All comparisons must be presented in landscape form side by side in a Microsoft Excel spreadsheet. The text portion, as well as the financial data for Institution A, is to be presented towards the left side of the center of the page. For Institution B, insert it towards the right side of the center. In this manner, you can easily read and quickly review and analyze the type of services offered, or the numbers for the same financial accounts without having to re-type the same information, or the name of the account twice. It is difficult to analyze numbers when they are presented in a row instead of columnar format or in a different page. Today, most financial statements and accounting reports show the most current numbers first to the left side of the page, and the older numbers to their right (see below).

4. The table comparison should be for the five (5) years ended Dec 31 shown as follows: (in million) (000) which means that if the institution has $500 million in assets, and loans comprise $ 300 million, it will be presented as shown below: The most current year is shown first (to the left side) and the oldest year last (to the right)

Total Loans

2020

2019

2018

2017

2016

EXAMPLE	Name Bank A	Name Bank B
Dec. 31				2020				2019				2018		2017		2016
Loans	$300.5	$275.3	$250.3	$225.4	$225.2	$305.3	$300.2	$299.7	$285.3	$275.0

5. You see how easily is to compare the amount of total loans for each bank for each year by looking across the page. You only have to type the account loans only once.

Note: The FFIEC numbers appear in 000 (thousands) which mean the last three numbers from right to left represent thousands, and the fourth to the sixth numbers represent millions. The seventh number is then at least a billion.

6. You need to analyze in this manner the major balance sheet and income accounts shown previously.

7. When you present the loan section, please break it down by type: Real Estate, Commercial, Consumer, other, as shown on the FFIEC Report, as well as the Allowance for Loan Losses Account (Balance Sheet statement) together with the Provision for Loan and Lease Losses (income statement).

8. When you complete the comparison for each account, then show below the numbers, one graph with a different color line for each bank showing the growth or reduction in assets or income and expenses as time elapses. In this case, the graph is presented differently, on the horizontal axis, the oldest year is shown first (to the left side) and the most current last (to the right). The vertical axis shows the smaller numbers towards the bottom of the graph and the larger number toward the top of the graph.

9. Please be consistent and maintain the same color for institution A and the same color for institution B on the financial tables and on the graphs.
Use only line graphs in the charts. Do not use pie charts or any other type of graphic illustration.

10

. Once you have inserted the financial table and the line graph for each major account, then write your trend analysis of the particular account in no more than five sentences.

11. Maintain the above described format for each account analyzed.

12. When comparing and analyzing ratios you must insert the ratios for the applicable peer group for all the five (5) periods.

13. Your analysis should discuss the trend of each bank when compared to the other and the peer group. This is very important to follow for all five periods being analyzed and evaluated.

14. Please do not forget to consult the federal and state regulatory agencies websites for any enforcement actions against the two financial institutions, especially today with the Bank Secrecy Act Compliance, (Anti-Money Laundering Laws and Regulations) and required bank policies and procedures. It is important to refer to information in the Enforcement Actions of the Federal Reserve Bank, Office of the Comptroller of the Currency, FinCEN, OFAC, and the Florida Office of Financial Regulation. Also search the local newspapers for any recent important information on the banks, as previously mentioned.

15. The information for rates paid on deposits may be found on the money page of the Sunday or Monday Miami Herald newspaper. Not all bank rates are published, so please contact the banks’ websites or call the banks. Commercial and Real Estate loan rates may not be published, as they are individually tailored, according to risk and collateral, so the banks may have to provide you a range of rates. Find out if they lend on Prime Rate, Treasury bill or notes rates or LIBOR base rates. Also determine what is their current prime rate?

16. When you arrive at the decision page, please note the following:

a) In the first case, you are a depositor, meaning you are a creditor. You are placing funds for a specific period of time at a specific rate of interest. The fact that a million-dollar deposit may not be FDIC insured, is not an acceptable reason to deny placing the deposit. The analysis is what is important, not the insurance. Is the bank liquid, profitable, operating in a safe and sound manner and of reasonable size for you to deposit that amount?

b) In the second case, you become an investor, a stockholder. What do you expect form this investment? There is no assurance that dividends will be paid, if you want to sell your shares, you may have to find a buyer in the market or sell to another stockholder willing to buy. How much has the share value grown or decreased in value during the in the last few years? What is the book value per share? What is the current market value per share? What kind of dividends have been paid in the past? If it is a new bank or a rapidly growing one, dividends may not be or cannot be paid.

c) In the third case you represent a bank which is lending funds on a short-term basis. Therefore, you are a creditor and you are approving using someone else’s money.

Good luck with this project. For a sample research report, please refer to the Assignment section of Canvas; click on the Research Digital Report Section and click again on Sample Research Paper-Comparison of Two (2) South Florida Commercial Banks. if you have any questions or doubts, please ask me during the class session, or send me an e-mail message through regular FIU E-mail only to: kerbelm@fiu.edu or call me at (305) 632-7997. This is very important assignment, which will help you analyze financial institutions in the future, as you become an officer or customer of one or more financial institutions during your lifetime. Prior class members have indicated that they were able to receive bank employment offers because of this analytical assignment.

Footnotes and Bibliography Requirements: It is a serious academic ethical violation not to give credit to the authors and the sources from where you obtained the information.
Please present both the footnotes or in-text-or end notes citations and bibliography
in accordance with an acceptable manual of style.
Internet addresses by themselves are not acceptable

.

You must write the information of the source and then insert the web URL locator.

It is very important to show the dates on all information presented and the date of the particular publication. Do not insert the date that you retrieved the information from the web, as it is not important in this case. What is very important is the date that the material was published on the web, where it was published and by whom. Please refer to a Manual of Style tab for guidance in properly inserting foot/end notes and bibliography.

The Research Paper may exceed 15 pages provided that there is no excess of unnecessary information. The report must show each page number on the bottom center or right side.

.

THIS RESEARCH PAPER WILL BE PRESENTED ONLY IN DIGITAL FORMAT WHICH WILL BE FORWARDED by the DUE DATE, not later than two Sundays prior to the end of the semester or April 11, 2021 at 11:55 p.m. PLEASE DO NOT WASTE PAPER IN PRINTING IT, AS IT WILL NOT BE ACCEPTED.

The completed report is to be sent to Professor Kerbel only through regular FIU e-mail to:

kerbelm@fiu.edu

(DO Not Use Canvas E-mail or SMS Texting or WhatsApp for This Report). In addition, the format of the subject line of the e-mail message must be shown as follows:

FIN 4324-Last Name, First Name, RP-Names of the two banks analyzed-2021-04-XX (day completed).

The actual attached Microsoft Word File should be labeled as follows:

Names of the two (2) banks-RP-2021-04-XX-FIN 4324-Last Name, First Name

In addition to forwarding the assignments by e-mail to the Professor as shown above and on page 07 of the syllabus and discussed in class, each Class Member will “drop” by the due date their digital research report into the Turnitin assignment box tab located on the Canvas-Turnitin Assignment Tab.

Reports will not be accepted after the Turnitin drop box has been closed.

Please note that if any of the guidelines stated above are NOT followed, including the sample cover page shown below, your grade for this bank comparison research assignment will drop by twenty (20) points.

This two-bank comparison analysis and evaluation assignment has a value of 10% of your final course grade.

SCROLL BELOW FOR SAMPLE OF REPORT COVER PAGE & FORMAT

FIN 4324 Commercial Bank Management

RESEARCH PAPER FORMAT — Sample Cover Page and Report

_____________________________

______________________

A Comparative Financial Trend Analysis of:

Name of Financial Institution (A)

Vis-a-vis

Name of Financial Institution (B)

Prepared for: Marcos A. Kerbel

Participating Adjunct Professor

Department of Finance

College of Business

Florida International University

In partial fulfillment of the

requirements of

Course: FIN 4324-Commercial Bank Management

Term: Spring, 2021
By:

_____________________________

Your Full Name

(as it appears in the FIU Course Roster)

Panther Student Number

Telephone No.

E-Mail Address

April ____, 2021

(The actual day when you completed this report)

Please present the report information in
landscape format (sideways) preferably in Microsoft Excel. Insert the data for each financial institution side by side.

Pages 2-4

I. General Bank Information: Where letters A & B appear, please Insert the actual names of the two (2) Financial Institutions you are presenting.

	General Bank Information			Name of Bank A			Name of Bank B
a) Names of Financial Institutions:
b) Head Office’s Address, City, State and Zip Code
c) Telephone and Fax Numbers:	Tel: ( )	Tel: ( )
Fax ( )	Fax: ( )
d) Website Address (Hyperlink):
e) Date Founded:
f) Primary Regulator (State, OCC and FDIC Certificate Number, if bank

General Bank Information

Name of Bank A

Name of Bank B

g) Peer Group Number & Description

h) Number of Banks in Peer Group:

i) Names of Directors and Principal Officers, such as: Chairman of Board, CEO, President, COO, CFO, and CIO and other Senior Officers only.

j) Number of Branches:

k) Number of Employees:

l) Mission Statement for each bank (Obtain from their Websites)

m) Each Bank’s Strategy:

n) Services and Products Offered:

o) Interest Rates paid on deposits (range) Look at Miami Herald’s Business Sunday or Monday Edition (Money Section) or in banks’ websites, or call the banks for rates. The rates’ date should be as of a specific date closest to date of report. Insert date of figures and source.

p) Service Charges (look at website or obtain Service Charge schedule and Loan Rates

2020

2019

2018

2020

2019

2018

Financial Highlights	Bank A	Bank B
As of Dec. 31,
q. Total Assets
r. Total Deposits
s. Total Liabilities
t. Total Equity
u. Net Income

PLEASE SCROLL DOWN TO NEXT PAGE

II. Financial Trend Comparison (pages 5-7)

For the latest Five (5) Years ended Dec. 31, 2020, 2019, 2018, 2017, 2016

Most current year should be shown in first column (left) and oldest in the last column (right)

For each of balance sheet and income statement account categories shown below, please present a comparative numbers’ table and graph. insert only one linear graph for each of the banks and write a paragraph regarding trend for each bank for the five years under review.

Present data in Microsoft Excel landscape format, otherwise information may not fit on a page without scrolling. Enter the actual names of both banks-side by side- on each page and use the same chosen colors for the particular bank throughout the presentation.

ASSETS (in millions)

As of Dec, 31

Bank A

Bank B

2020

2019

2018

2017

2016

2020

2019

2018

2017

2016

Cash & Due from Banks

Investments:

Federal Funds Sold (Overnight Funds)

Bond Portfolio (Securities)

Loans

Real Estate

Commercial

Consumer

Agricultural

Total Loans

Less: Allowance for loan losses

Net loans

Fixed assets (Premises & Equipment)

TOTAL ASSETS

Insert Actual Names of Banks A Bank B on every page and show the same color.

Pages 6-9 (Cont’d)

LIABILITIES

Bank A

Bank B

2020

2019

2018

2017

2016

2020

2019

2018

2017

2016

Deposits:

Non-interest bearing

Interest bearing

Total Deposits

Borrowings (from other banks) ·

TOTAL LIABILITIES

Stockholders’ Equity (a/k/a Equity or New Worth)

Common Stock

Surplus

Retained Earnings

Dividends Paid

Total Stockholders” Equity

TOTAL LIABILITIES & EQUITY

Income and Expense categories should be compared for the latest five (5) years ended:
December 31, 2020, 2019, 2018, 2017, 2016

Most current year should be shown in first column (left) and oldest in the last column (right)

Actual Names of Institution to be shown instead of A and B

Ratio Analyses

Bank A

Bank B

2020

2019

2018

2017

2016

2020

2019

2018

2017

2016

INCOME

Interest Income

Investment Income

Non-Interest Income

TOTAL INCOME

EXPENSES

Interest Expense

Salaries & Benefits

Provisions for Loan & Lease Loses

Other Expenses

Taxes

TOTAL EXPENSES

NET INCOME

Most current year should be shown in first column (left) and oldest in the last column (right)

Page 8

III. Comparative Financial Analysis of each bank to the other and to their respective Peer Group

RATIO ANALYSES

Bank A

Bank B

Peer Group

As of Dec. 31,

2020

2019

2018

2017

2016

2020

2019

2018

2017

2016

2020

2019

2018

2017

2016

Return on Assets

Return on Equity

Efficiency Ratio

Net Interest Margin

Amount of Loan Charge-Offs

Percentage of Loan Charge-Offs to Total Loans

Number of Employees

Assets Per Employee

Average Salary per Employee

PLEASE SCROLL DOWN TO NEXT PAGE

Page 9

IV. Search the Web-Sites of the Florida State Office of Financial Regulation, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve Bank and the Securities and Exchange Commission for any Consent or Cease and Desist Orders, (C&Ds’) Memos of Understanding (MOUs’) and Other Regulatory Enforcement Actions, as well as newspaper articles for important recent information on each of the two banks. For banks, you may use the Bauer Financial Reports (

Star Ratings

).
Also consult the Miami Herald, The Miami Daily Business Review and the South Florida Business Journal.

Financial Institutions A and B

REGULATORY ENFORCEMENT ACTIONS

V. Complete the Analysis by Doing a Comparative

SWOT ANALYSIS for both Financial Institutions

Name of Bank A

Name of Bank B

REGULATORY ENFORCEMENT ACTIONS

SWOT ANALYSIS ·

Strengths

Weaknesses

Opportunities

Threats

PLEASE SCROLL DOWN TO NEXT PAGE

Page 10

VI. CONCLUSION AND DECISIONS Based on the above analysis, you arrive at the conclusion by writing a paragraph for each of the following three decisions; whether you will do it for one bank or the other only, for both banks, or for none of the banks.

You must support your conclusions with reasoned statements as to why yes or why not with respect, to either bank, both banks, or neither bank

DECISIONS

1. Would you place a personal deposit $1 million dollars or more in these two institutions or banks? Therefore, being at risk, since the FDIC insurance coverage is only for $250,000.00. FDIC coverage should be considered irrelevant for purposes of this analysis.

2. Would you invest at least $500,000 in these two institutions? Why yes or no and why?

3. If you were a member of the Board of Directors of a third bank and you sat on that Bank’s Credit Committee, would you grant a $1-million-dollar line of credit for Overnight or Term Federal Funds to these financial institutions?

VII. BIBLIOGRAPHY:

Web-Site addresses by themselves are not acceptable. All sources are to be shown in accordance with an acceptable manual of style

PLEASE SCROLL DOWN TO NEXT PAGE

Rev. 2021-01

10

Cover Page

FIN4

3

24 COMMERCIAL BANK MANAGEMENT RESEARCH PAPER A Comparative Financial T

re

nd Analy

s

is of: Bank of Coral Gables vis-a-vis Intercontinental Bank Prepared for: Marcos A. Kerbel Adjunct Professor Department of Finance Florida International University In Partial fulfillment of the Requirements of Course: FIN 4324

Commercial

Bank Management

Term: Summer, 2

0 1

1 By: Elys Panther ID: 3333338 Phone: (305)

12

3-45

6

7 abcdefg@fiu.edu 15-Jun-11

&F

mailto:abcdefg@fiu.edu

I. General Bank Information

I. General Bank Information
Column1 Column3 Column4 Name of Bank

Bank of Coral Gables Intercontinental Bank
Principal Address, City, State and Zip Code of Head Office 22

95 Galiano Street Coral Gables, FL 33134 5722 SW 8 Street West Miami, FL 33144 Telephone Numbers: (305) 500 9501 Miami-Dade (954) 707

55

01 Broward (305) 263 7900 Miami-Dade Fax Numbers: (305) 567 5400 Miami-Dade Website Address (Hyperlink): http://www.bankofcoralgables.com http://www.intercontinentalbk.com Date Founded: June 5,

20

06 June 21, 2002 Primary Bank Regulator (State or OCC) State of Florida FDIC State of Florida FDIC FDCI Certificate Number 58131 57214

Total Assets

as of:

Dec 31.

201

0 $

151,841

,000 $

142,755

,000 Dec 31,

2009 $

158

,612

,000 $

147,305

,000 1st Quarter 2011 $

145,320

,000 $

138,215

,000 1st Quarter

2010 $

139,980

,000 $14

8,100

,000

Total Deposits

Dec 31. 2010

$

141,8

17

,000 $

120,702

,000 Dec 31, 2009

$

144,347

,000 $

121,000

,000 1st Quarter 2011

$

135,844

,000 $

1

18

,995

,000 1st Quarter 2010

$

126,243

,000 $

126,550

,000

Column1 Column3 Column4

Total Liabilities

Dec 31. 2010

$142,

19

3,000 $

126,462

,000 Dec 31, 2009

$

145,548

,000 $

131,965

,000 1st Quarter 2011

$136,

184

,000 $

121,731

,000 1st Quarter 2010

$

127,611

,000 $

132,493

,000 Bank of Coral Gables Intercontinental Bank

Net Income

Year 2010 ($5,

481

,000) $

951

,000 Year 2009 ($6,184,000) $

940

,000 1st Quarter 2011

($823,000) $

190

,000 1st Quarter 2010

($740,000) $

267

,000 Total Equity Dec 31. 2010

$9,648,000 $

16,293

,000 Dec 31, 2009

$1

3,064

,000 $

15,340

,000 Peer group Number

6 6
Peer group Description Insured commercial banks having assets between $100 million and $300 million, with 2 or fewer full service banking offices and located in a metropolitan statistical area

Insured commercial banks having assets between $100 million and $300 million, with 2 or fewer full service banking offices and located in a metropolitan statistical area
Number of Banks in Peer Group 387

387
Chairman of Board William H. Kerdyk, Jr. William L. Morrison CEO Simon Cruz Amadeo Lopez-Castro President

Simon Cruz Amadeo Lopez-Castro
COO Marela Valladares John A. Baron CFO Mark Snelling Jack A. Furman Number of Branches

1 1
Number of Employees 25

19

Bank of Coral Gables Intercontinental Bank

Mission Statement The combination of our Directors, Shareholders, Officers and staff has enabled us to form a strong foundation upon which to build safe and soundly run financial institution. is not available as public information. Bank Strategy Bank of Coral Gables offers a complete selection of Intercontinental Bank operates as a subsidiary of commercial banking products and services designed Intercontinental Bankshares, LLC. specially for small and mid-size business. Products and Services Offered Checking Accounts

Checking Accounts
Savings Accounts

Savings Accounts
Money Market Account

s

Money Market Accounts
IRA’s Accounts

IRA’s Accounts
Loans

Loans
Home Mortgage and Equity

Home Mortgage and Equity
Online Banking

Online Banking
Business/Commercial:

Business/Commercial:
Business Checking

Business Checking
Business Savings

Business Savings
Business Money Market Accounts

Business Money Market Accounts
Total Investment Account

Total Investment Account
Commercial Loans

Commercial Loans
Interest Rates Paid on Certificates of Deposits 3 Month CD <$100,000 : 0.40% APY 30 Day CD <$100,000 : 0.30% APY 6 Month CD <$100,000 : 0.60% APY 90 Day CD <$100,000 : 0.50% APY 9 Month CD <$100,000 : 0.75% APY 180 Day CD <$100,000 : 0.75% APY 12 Month CD <$100,000 : 1.00% APY 365 Day CD <$100,000 : 1.10%

APY * All with a min. opening and balance of

$2,500

* All with a min. opening and balance of $2,500
9 Month CD => $100,000 : 0.60% APY 30 Day CD >$100,000 : 0.30% APY 18 Month CD => $100,000 : 1.25% APY 90 Day CD >$100,000 : 0.50% APY 24 Month CD => $100,000 : 1.35% APY 180 Day CD>$100,000 : 0.75% APY 36 Month CD => $100,000 : 1.75% APY 365 Day CD>$100,000 : 1.20% APY 60 Month CD => $100,000 : 2.30% APY * All with a min. opening and balance of $100,000

* All with a min. opening and balance of $100,000
Interest Rate Paid on IRA’s 12 Month IRA <$100,000 : 1.00% APY 3 Month IRA <$100,000 : 1.00% APY 18 Month IRA <$100,000 : 1.25% APY 5 Month IRA <$100,000 : 1.15% APY 24 Month IRA <$100,000 : 1.35% APY 6 Month IRA <$100,000 : 1.25% APY 36 Month IRA <$100,000 : 1.75% APY 7 Month IRA <$100,000 : 1.30% APY 48 Month IRA <$100,000 : 2.00% APY 8 Month IRA <$100,000 : 1.30% APY 60 Month IRA <$100,000 : 2.30% APY 12 Month IRA <$100,000 : 1.50% APY * All with a min. opening and balance of $500.00

* All with a min. opening and balance of $500.00

Bank of Coral Gables Intercontinental Bank

Interest Rate Paid on IRA’s

12 Month IRA>$100,000 : 1.00% APY 3 Month IRA =>$100,000 : 1.00% APY 18 Month IRA >$100,000 : 1.25% APY 5 Month IRA =>$100,000 : 1.15% APY 24 Month IRA>$100,000 : 1.35% APY 6 Month IRA =>$100,000 : 1.25% APY 36 Month IRA>$100,000 : 1.75% APY 7 Month IRA =>$100,000 : 1.35% APY 48 Month IRA>$100,000 : 2.00% APY 8 Month IRA =>$100,000 : 1.30% APY 60 Month IRA>$100,000 : 2.30% APY 12 Month IRA =>$100,000 : 1.55% APY Interest Paid in Money Market $0-$2,499.99 : 0.25% APY $2,500-$9,999.99 : 0.75% APY $3,000-$49,999.99 : 0.35% APY $10,000-$24,999.99 : 1.00% APY $50,000-$99,999.99 : 0.60% APY $25,000-$99,999.99 : 1.15% APY $100,000-500,000 : 0.75% APY =>$100,000 : 1.25% APY * Min. opening deposit of $2,500

* Min. opening deposit of $2,500
Interest Paid in Savings NOW Regular : 0.25% APY NOW Regular : 0.20% APY * Min opening deposit of $2,500.00 * Min opening deposit of $100.00 Personal 0.25% APY Personal 0.38% APY * Min opening deposit of $50.00

* Min opening deposit of $100.00
Business 0.75% APY

Business 0.75% APY
Services fees The Gables EZ Checking Opening Balance: $250 Opening Balance: $5 Minimum Balance Requirement: $1,000 avg. daily Minimum Balance Requirement: no minimum Monthly Service Fee: $10

plus $0.35 per item Monthly Service Fee: $10

charge if balance falls below $1,000.00 The Gables Classic Checking Opening Balance: $50 Minimum Balance Requirement: $250 Monthly Service Fee: $10
Personal Interest Checking – NOW Account

Personal Interest Checking – NOW Account
Opening Balance: $250

Opening Balance: $1,200 Minimum Balance Requirement: $1,000 avg. daily

Minimum Balance Requirement: $1,200 avg. daily Monthly Service Fee: $10

Monthly Service Fee: $15 plus $0.35 per item charge if balance falls below $1,000.00

charge if balance falls below $1,200.00 Money Market Account

Intercontinental Account (Money Market) Opening Balance: $1,000 Opening Balance:

$2,700 Minimum Balance Requirement: $2,500 avg. daily Minimum Balance Requirement: $2,700 avg. daily Monthly Service Fee: $10 if balance falls below Monthly Service Fee: $15 if balance falls below $2,500 $2,700
Loan rates Loan rates vary upon applicant

Loan rates vary upon applicant
Local Estimates according to BankRate.com 30 yr Mortgage Fixed, 0 Points for $300,000 4.625% APR – 4.750% APR National Average 4.58% RATE

http://www.bankofcoralgables.com/

http://www.intercontinentalbk.com/

II. FIN Trend

II. Financial Trend Comparison BALANCE SHEET- ASSETS Graph Data Numbers are in thousands (000) CASH

Bank of Coral Gables Intercontinental Bank

2008

2009 2010

2010-1Q 2011-1Q 2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

6,416 2,760 1,725 2,413 1,790

Cash and Due

from Banks $

585 3,091 729 3,701 1,101

1,790 2,413 1,725 2,760 6,416 Bank of Coral Gables 1,101 3,701 729 3,091 585

Bank of Coral Gables shows a very unstable cash trend but overall appears to decline. However, Intercontinental Bank shows a very sharp declining trend lossing more than 70% of its cash and due. INVESTMENTS

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

1,689

0 0 0 0

Federal Funds Sold

$ 0

2,040

0

5,355 16,833

0 0 0 0 1,689 Bank of Coral Gables 16,833 5,355 0 2,040 0

Federal funds started to decline after 2008, the worst part of the financial crisis. As banks have started to face liquidity problems, they have become unable to sell funds to other financial institutions. Bank of Coral Gables looks to be particulary affected for this situation. Intercontinental Bank shows less comparative decline.

INVESTMENTS Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

91,422 121,026 111,581 120,668 111,187

Bond Portfolio

$

32,892 3,011 25,055 2,995 2,034

111,187 120,668 111,581 121,026 91,422 Bank of Coral Gables 2,034 2,995 25,055 3,011 32,892

Intercontinental Bank holds a greater bond portfolio than Bank of Coral Gables. Perhaps, that is related to the Intercontinental’s strong investment in Federal Funds during 2008-09. Intercontinental Bank could be holding more liquid assets in order to increases its liquidity in the short-term. LOANS

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

11,6

78

8,100

11,458 8,210 13,401

Real Estate

$

87,118 115,146 92,790 119,789 124,620

13,401 8,210 11,458 8,100 11,678 Bank of Coral Gables 124,620 119,789 92,790 115,146 87,118

Intercontinental Bank has less exposure to real estate loans than Bank of Coral Gables. However, Bank of Coral Gables’s real estate loans have been declining during last years. This trend could be explained by the toxic loans’ write-off. On the other hand, Intercontinental Bank’s loans have increased.

LOANS Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

8,887 5,

570 5,225 5,081 5,

820 Commercial $ 6,367 1,560 5,683 1,553 2,544

5,820 5,081 5,225 5,570 8,887 Bank of Coral Gables 2,544 1,553 5,683 1,560 6,367
While Bank of Coral Gables has strongly increased its commercial loan portfolio during the last year, Intercontinental Bank shows a mild decline of those loans since 2008. However, it appears to be a timid recuperation for Intercontinetal during last year.

LOANS Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

765 792

820

889 97

4 Consumer $

184 0

292

1 3 974 889 820 792 765 Bank of Coral Gables 3 1 292 0 184
Bank of Coral Gables’s number of consumer loans has increased in the last year. By the contrary, Intercontinental Bank’s consumer loan portfolio has been increasing with a good pace during the whole period.

LOANS Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank 0 0 0 0 0
Agricultural $

0 0 0 0 0 0 0 0 0 0 Bank of Coral Gables 0 0 0 0 0
None of the banks are involved in Agricultural lending.

LOANS Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

21,747 14,952 18,590 14,933 21,065

Total Loans

$

93,682 120,696 102

,

536 125,797 131,200

21,065 14,933 18,590 14,952 21,747 Bank of Coral Gables 131,200 125,797 102,536 120,696 93,682

There is an appreciable difference between the banks’ amounts of loans, which clearly shows hightest levels of lending for Bank of Coral Gables. By the contrary, Intercontinental Bank have a comparative low amount of lending and seems to be reaching its 08′ levels. However, Bank of Coral Gables has steadly decrease its loan’s portfolio even after the crisis but only exception at beginning 2010. ALLOWANCE FOR LOAN LOSSES

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

117 182 217 235 224 ALL $ 3,374

3,064

3,422 3,298 1,535

224 235 217 182 117 Bank of Coral Gables 1,535 3,298 3,422 3,064 3,374
Bank of Coral Gables’ exposition to subprime loans could be the reason why it have increased its allowances for loans. By the contrary, Intercontinental Bank still expecting to see losses in its loans have separated a much less significant amount to cover it. During last year, Bank of Coral Gables’ allowance has increased even thought its total loan are decresing. NET LOANS

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

21,630 14,770 18,373 14,698 20,841

Net Loans

& Leases $

90,308 117,932 99,

114 122,499 130,268

20,841 14,698 18,373 14,770 21,630 Bank of Coral Gables 130,268 122,499 99,114 117,932 90,308

Intercontinemtal Bank seems to be reaching the 08′ levels of lending. However, Bank of Coral Gables has steadly decrease its loan’s portfolio even after the crisis but only exception at beginning 2010. FIXED ASSETS

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

619 551

585

549 577

Fixed Assets

$ 201

345 241 383

481 577 549 585 551 619 Bank of Coral Gables 481 383 241 345 201

Intercontinental Bank shows a very stable trend; however, Bank of Coral Gables’ fixed assets have decreasing for motre than 25% during the period. Perhaps, Bank of Coral Gables has lessen its size in order to reducing its expenses. TOTAL ASSETS

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

122,951

147,305 142,755

148,100

138,215
Total Assets $

145,320 139,980 151,841 158,612

160

,227

138,215 148,100 142,755 147,305 122,951 Bank of Coral Gables 160,227 158,612 151,841 139,980 145,320
Bank of Coral Gables’ total assets have been decreasing almost a 10% during the period. It is possible that as its loans turn sour it should sacrifice liquidity and assets to cover its loan losses. On the other hand, Intercontinental Bank has been increasing its assets. Maybe this is consequence of a more conservative strategy of investment: a lot of bonds, well-selected commercial loans, moderate consumers loan, and low level of loan losses. BALANCE SHEET- LIABILITIES

Numbers are in thousands (000)

DEPOSITS

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

19,226 24,977 25,620 30,015 25,328 Non-

Interest Bearing $ 12,944 7,269 12,029 7,216 5,175

25,328 30,015 25,620 24,977 19,226 Bank of Coral Gables 5,175 7,216 12,029 7,269 12,944
Both banks have experienced growth in this category. However, Bank of Coral Gables has experienced more growth than Intercontinental. This might be related to a superior involvement in the local community.

DEPOSITS Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

131,517 170

,273 190,508 197,113 190,044 Interest Bearing $

130,028 129,977 135,477 149,230 131,701

190,044 197,113 190,508 170,273 131,517 Bank of Coral Gables 131,701 149,230 135,477 129,977 130,028
Intercontinental Bank has been incresing its interest bearing deposits during the period; however, Bank of Coral Gables has experienced a decrease since 2009. In resume, Bank of Coral Gables has seen a slight reduction in its interest bearing deposit.

DEPOSITS Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

101,588

121,000 120,702 126,550 118,995
Total Deposits $

135,844 126,243 141,817 144,347

130,716

118,995 126,550 120,702 121,000 101,588 Bank of Coral Gables 130,716 144,347 141,817 126,243 135,844
Both Banks has increased their total deposits. However, Bank of Coral Gables has done a better job increasing its deposits while Intercontinental Bank has seen a decrease since 2010. The difference might be in that Intercontinental Bank is less active in the community and this might be an obstacle in retaining and or attracting new customers. BORROWINGS

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

6,725 10,856 5,647 5,676 2,520

Federal Funds Purchase

d $ 0 0 0 0 0 2,520 5,676 5,647 10,856 6,725 Bank of Coral Gables 0 0 0 0 0

Intercontinental Bank is in deeper liquidity problems than Bank of Coral Gables. As it can be seen, Interconental Bank has consistently purchase federal funds, which basically means that is has taken overnight loans with other banking institutions. However, since 2009, Intercontinental Bank has been reducing its need for Federal Funds Purchases. Perhaps, a sign that the worst had happenned. TOTAL LIABILITIES

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

108,551

131,965 126,462 132,493 121,731
Total Liabilities

$

136,184

127,611

142,193

145,548

141,100

121,731 132,493 126,462 131,965 108,551 Bank of Coral Gables 141,100 145,548 142,193 127,611 136,184
Bank of Coral Gables have seen a sligh decline of its total liabilities. In the case of Intercontinental Bank, it has had a moderate increase in its liabilities. Both trends are related to how deposits have behave during this period. BALANCE SHEET- STOCKHOLDERS

EQUITY Numbers are in thousands (000)
EQUITY Bank of Coral Gables Intercontinental Bank

c p

2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

4,

150

4,150 4,150 4,150 4,150

Common and Preferred Stock

11,921 9,622 11,263

9,622

9,605

4,150 4,150 4,150 4,150 4,150 Bank of Coral Gables 9,605 9,622 11,263 9,622 11,921

Both bank does not have preferred stocks. The number of stocks outstanding for Intercontinental Bank is minor compared to Bank of Coral Gables. Only, Bank of Coral Gables has increased its number of stock since 2010. EQUITY Bank of Coral Gables Intercontinental Bank s 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

4,200

4,200 4,200 4,200 4,200

Surplus

$

10,084 10,019 10,069 9,990 9,847

4,200 4,200 4,200 4,200 4,200 Bank of Coral Gables 9,847 9,990 10,069 10,019 10,084

Bank of Coral Gables has been able to sell more of its stock above par value. Intercontinental Bank also shows a positive trend of increasing surplus capital. EQUITY Bank of Coral Gables Intercontinental Bank re 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

6,050 6,990 7,943 7,257 8,134

Retained Earnings

$

-12,847 -7,283 -12,023 -6,543 -359

8,134 7,257 7,943 6,990 6,050 Bank of Coral Gables -359 -6,543 -12,023 -7,283 -12,847

As banks incurr losses, their retained earnings start to decrease. Bank of Coral Gables has suffered a major drop in retained earnings. This can be attributed to the loans that started to default as the financial crisis worsened. On the other hand, Intercontinental Bank, looks to be increasing its retaining earnings. EQUITY Bank of Coral Gables Intercontinental Bank

dp

2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank 0 0 0 0 0
Dividends Paid $

0 0 0 0 0 0 0 0 0 0 Bank of Coral Gables 0 0 0 0 0
Because of the financial crisis, many banks have been obligated to not distribute any dividends to their shareholders. In this case, both banks do not have distributed any dividends. EQUITY Bank of Coral Gables Intercontinental Bank

tse

2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

14,400

15,340 16,293

15,607 16,484 Total Stockholder Equity $

8,134 7,257 7,943 6,990 6,050 16,484 15,607 16,293 15,340 14,400 Bank of Coral Gables 6,050 6,990 7,943 7,257 8,134
Both banks have seen a increase in their equities. Intercontinental Bank has an relative greater equity than Bank of Coral Gables. EQUITY Bank of Coral Gables Intercontinental Bank

tlae

2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank 122,951 147,305 142,755 148,100 138,215

Total Liabilities and Equity

$ 145,320 139,980 151,841 158,612 160,227 138,215 148,100 142,755 147,305 122,951 Bank of Coral Gables 160,227 158,612 151,841 139,980 145,320

Both of this banks have seen the combination of equity and liability declining consistently since 2008. Bank of Coral Gables have experienced a decrease in its total liabilities and equity during all period; however, Intercontinental Bank only has presented this declination during the lasst year. INCOME

STATEMENT- INCOME

Numbers are in thousands (000)

INCOME Bank of Coral Gables Intercontinental Bank

interest income

2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

5,673 4,762 4,335 1,175 1,073

Interest Income

$

1,513 1,726 6,360 7,779 8,939

1,073 1,175 4,335 4,762 5,673 Bank of Coral Gables 8,939 7,779 6,360 1,726 1,513

Both banks have been struggling with income generation. They suffered a harsh decline in its interest income during the whole period. However, the Bank of Coral Gables’ reduction on interest income has been more notorius as effect of the financial crisis. Intercontinental Bank also experienced a sharp decline. INCOME Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

3,657 3,310 3,170 896 710

Investment Income

$ 170 12

189

55

112

710 896 3,170 3,310 3,657 Bank of Coral Gables 112 55 189 12 170

For Intercontinental Bank, investment income is a major source of income. Contrary to others banks in its peer group, Intercontinental’s revenues are not principally generated by the bank’s operations. Bank of Coral Gables had a minor component of its revenues that is generated by investments.

INCOME Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

1,834 1,626 1,614 403 265 Non-

Interest Income $

102 18

-172

97 78 265 403 1,614 1,626 1,834 Bank of Coral Gables 78 97 -172 18 102
Bank of Coral Gables shows extremely weaknes in this category since its income has been decreasing during the whole period and even has reached negative values in 2010. By the contrary, Intercontinetal Bank have experienced a moderate reduction of this income.

INCOME Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

11,164 9,698 9,119 2,

474 2,048

Total Income

$

1,785 1,

756 6,377 7,931 9,129

2,048 2,474 9,119 9,698 11,164 Bank of Coral Gables 9,129 7,931 6,377 1,756 1,785

Both financial institutions, Bank of Coral Gables and Intercontinental Bank, have been struggling in their total income, which have been on a steep decline during the whole period. INCOME STATEMENT-

EXPENSE

S

Numbers are in thousands (000)

EXPENSE Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

2,675 1,812 1,420 375 301

Interest Expense

$

390

570

1,959 4,121 4,681

301 375 1,420 1,812 2,675 Bank of Coral Gables 4,681 4,121 1,959 570 390

Intercontinental Bank and Bank of Coral Gables both are seeing a sharp decrease in their cost of funds during the whole period. Perhaps, the combination of reducing expenses, lower rate of interests, and downsizing have contributed to this savings.

EXPENSE Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

2,948 3,020 3,154

756

733

Salaries and Benefits

$

1,574 1,349 4,941 3,830 2,757

733 756 3,154 3,020 2,948 Bank of Coral Gables 2,757 3,830 4,941 1,349 1,574

Bank of Coral Gables’ salaries and benefits have increased almost the double during the period. However, Intercontinental Bank’s expenses in salaries and benefits are almost the same.

EXPENSE Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

528

160 150 55 0
Provisions for Loan Losses $

474

565 4,769 6,109 1,024

0 55 150 160 528 Bank of Coral Gables 1,024 6,109 4,769 565 474
Bank of Coral Gables has allocated substancial amounts of money for covering loans’ losses during the period; however, it appears that in 2010 this expenses began to decrease. On the other hand, Intercontinental Bank’s low exposure to subprime loans have avoid it to separate signicant funds to cover loans’ losses.

EXPENSE Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

452 568

536 158 114

Taxes

$ 0 0 0 0 0 114 158 536 568 452 Bank of Coral Gables 0 0 0 0 0

Intercontinental Bank has been paying taxes according to its improvement in operations; however, Bank of Coral Gables has confronted a more difficult situation. It has been declaring operating losses during the complete period, and receiving tax creditds instead of paying taxes.

EXPENSE Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

6,576 5,550 5,257 1,343 1,148

Total Expenses

$

2,438 2,484 11,669 14,060 8,462

1,148 1,343 5,257 5,550 6,576 Bank of Coral Gables 8,462 14,060 11,669 2,484 2,438

Bank of Coral Gables has allocated substancial amounts of money for covering loans’ losses; aditionally, salaries and benefits have increased almost the double during the period. Both factors have contributed to increasing expenses for Bank of Coral Gables. On the other hand, Intercontinental Bank’s low exposure to subprime loans, and relative low salaries and benefits expenses, have allowed it to reduce its total expenses. NET INCOME

Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

947

940 951 267 190
Net Income $ -823 -740 -5,481 -6,184 555

190 267 951 940 947 Bank of Coral Gables 555 -6,184 -5,481 -740 -823
Intercontinental Bank has reached a positive, decent net income since 2008. By the contrary, Bank of Coral Gables is reporting heavy-negative losses during the same period, and it appears to not foreseing an end to this devasting situation.

Cash and Due
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 6416 2760 1725 2413 1790 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 1101 3701 729 3091 585
Fixed Assets
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 619 551 585 549 577 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 481 383 241 345 201
Total Assets
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 122951 147305 142755 148100 138215 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 160227 158612 151841 139980 145320

Non-Interest Bearing Deposit

Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 19226 24977 25620 30015 25328 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 5175 7216 12029 7269 12944

Interest Bearing Deposits

Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 131517 170273 190508 197113 190044 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 131701 149230 135477 129977 130028
Total Deposits
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 101588 121000 120702 126550 118995 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 130716 144347 141817 126243 135844
Federal Funds Purchase
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 6725 10856 5647 5676 2520 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 0 0 0 0 0
Total Liabilities
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 108551 131965 126462 132493 121731 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 141100 145548 142193 127611 136184
Common and Preferred Stock
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 4150 4150 4150 4150 4150 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 9605 9622 11263 9622 11921
Surplus
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 4200 4200 4200 4200 4200 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 9847 9990 10069 10019 10084
Retained Earnings
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 6050 6990 7943 7257 8134 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q -359 -6543 -12023 -7283 -12847
Federal Funds Sold
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 1689 0 0 0 0 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 16833 5355 0 2040 0

Total Shareholders Equity

Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 14400 15340 16293 15607 16484 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 6050 6990 7943 7257 8134
Total Liabilities and Equity
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 122951 147305 142755 148100 138215 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 160227 158612 151841 139980 145320
Interest Income
Intercontinental Bank 2008 2009 2010 5673 4762 4335 Bank of Coral Gables 2008 2009 2010 8939 7779 6360
Investment Income
Intercontinental Bank 2008 2009 2010 3657 3310 3170 Bank of Coral Gables 2008 2009 2010 112 55 189

Non-interest Income

Intercontinental Bank 2008 2009 2010 1834 1626 1614 Bank of Coral Gables 2008 2009 2010 78 97 -172 Total Income
Intercontinental Bank 2008 2009 2010 11164 9698 9119 Bank of Coral Gables 2008 2009 2010 9129 7931 6377 Interest Expense
Intercontinental Bank 2008 2009 2010 2675 1812 1420 Bank of Coral Gables 2008 2009 2010 4681 4121 1959 Salaries and Benefits
Intercontinental Bank 2008 2009 2010 2948 3020 3154 Bank of Coral Gables 2008 2009 2010 2757 3830 4941

Provisions for Loans Losses

Intercontinental Bank 2008 2009 2010 528 160 150 Bank of Coral Gables 2008 2009 2010 1024 6109 4769 Taxes
Intercontinental Bank 2008 2009 2010 452 568 536 Bank of Coral Gables 2008 2009 2010 0 0 0 Bond Portfolio
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 91422 121026 111581 120668 111187 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 2034 2995 25055 3011 32892
Total Expenses
Intercontinental Bank 2008 2009 2010 6576 5550 5257 Bank of Coral Gables 2008 2009 2010 8462 14060 11669 Net Income
Intercontinental Bank 2008 2009 2010 947 940 951 Bank of Coral Gables 2008 2009 2010 555 -6184 -5481 Real Estate
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 11678 8100 11458 8210 13401 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 124620 119789 92790 115146 87118
Commercial
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 8887 5570 5225 5081 5820 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 2544 1553 5683 1560 6367

Consumers

Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 765 792 820 889 974 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 3 1 292 0 184
Total Loans
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 21747 14952 18590 14933 21065 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 131200 125797 102536 120696 93682
Net Loans
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 21630 14770 18373 14698 20841 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 130268 122499 99114 117932 90308

Allowances for Loans Losses

Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 117 182 217 235 224 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 1535 3298 3422 3064 3374

III. Ratio Analysis

III. Comparative Financial Analysis RATIO ANALYSIS 2008 2009 2010 2010-1Q 2011-1Q
RATIO ANALYSIS Bank of Coral Gables Intercontinental Bank Intercontinental Bank

0.77% 19.81% -3.09% 10.31% -6.67% 2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Bank of Coral Gables

38.14% -1.01% -4.27% -21.31% 3.81% Return on Assets

3.81% -21.31% -4.27% -1.01% 38.14% -6.67% 10.31% -3.09% 19.81% 0.77%

Peer Group 6 8.66% 4.85% 0.72% 3.91%

1.10%

Peer Group 6
2011-1Q 2010-1Q 2010 2009 2008
1.10% 3.91% 0.72% 4.85% 8.66%
Both banks have experienced negative returns on assets since 2008. Despite, a decline on ROA was experienced by the Peer Group six, the average decline in this group was not as strong as in the case of the two banks studied. However, in the last year, Bank of Coral Gables has experienced a recuperation and posted positve returns.

2008 2009 2010 2010-1Q 2011-1Q

RATIO ANALYSIS Bank of Coral Gables Intercontinental Bank Intercontinental Bank

6.79% 6.30% 6.00% 6.90% 4.64% 2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Bank of Coral Gables

2.99% -38.53% -49.88% -23.28% -35.05% Return on Equity

-35.05% -23.28% -49.88% -38.53% 2.99% 4.64% 6.90% 6.00% 6.30%

6.8%

Peer Group 6

3.40% -4.08% 0.73% 1.40% 2.67%

Peer Group 6
2011-1Q 2010-1Q 2010 2009 2008

2.67% 1.40% 0.73% -4.08% 3.40%
In comparison to its peer group, Intercontinental Bank had a best trend ; however, Bank of Coral Gables shows a complete underperformed pattern againts its peers as well as Intercontinental. Bank of Coral Gables has reached very disappointed ratios that indicates constant losses in shareholders equity. RATIO ANALYSIS Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

61.01% 65.99% 69.63% 62.81% 70.68% Efficiency Ratio

70.68% 62.81% 69.63% 65.99% 61.01% 70.68% 62.81% 69.63% 65.99%

61.0%

Bank of Coral Gables

63.6% 102.00% 116.84% 114.91% 128.49% Peer Group 6

70.50% 78.40% 75.66% 76.76% 75.86%

Peer Group 6
2011-1Q 2010-1Q 2010 2009 2008

128.49% 114.91% 116.84% 102.00%

63.58% Bank of Coral Gables shows a really high level for this ratio, which could represent either a fall in revenues or management’s inability to control expenses in the organization. On the other hand, Intercontinental Bank shows better ratios during this period than its peer group.

2008 2009 2010 2010-1Q 2011-1Q

RATIO ANALYSIS Bank of Coral Gables Intercontinental Bank Intercontinental Bank

0.54% 1.22% 1.17% 1.57% 1.06% 2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Bank of Coral Gables

1.16% 2.62% 3.34% 2.53% 3.60%

Loan Charge-Offs

3.60% 2.53% 3.34% 2.62% 1.16% 1.06% 1.57% 1.17% 1.22%

0.5%

Peer Group 6

1.48% 1.94% 2.08% 1.97% 2.15%

Peer Group 6
2011-1Q 2010-1Q 2010 2009 2008

2.15% 1.97% 2.08% 1.94% 1.48%
Intercontinental Bank shows a better performance than its peers on group six; however, Bank of Coral Gables’ ratios are well above its peers’ average. This situation is consequence of the high exposure that this bank have to subprime loans in its portfolio.

RATIO ANALYSIS Bank of Coral Gables Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q

2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Intercontinental Bank

6.15% 7.37% 7.51% 7.41% 7.27% Assets Per Employee (millions)

7.27% 7.41% 7.51% 7.37% 6.15% 7.27% 7.41% 7.51% 7.37%

6.2%

Bank of Coral Gables

9.4% 7.93%

6.90%

6.36% 5.81% Peer Group 6

5.22% 5.46% 5.39% 5.56% 5.51%

Peer Group 6
2011-1Q 2010-1Q 2010 2009 2008

5.81% 6.36% 6.90% 7.93%

9.43% Stable banks should have minimum variations in this ratio. However, Intercontinental Bank shows an increase as consequence of either using less employees or increasing the value of its assets. By the contrary, Bank of Coral Gables shows a decrease, mainly, because the value of the assets which were mostly mortgage loans have been declining.

2008 2009 2010 2010-1Q 2011-1Q

RATIO ANALYSIS Bank of Coral Gables Intercontinental Bank Intercontinental Bank 20 20 19 20 19
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008 Bank of Coral Gables 17 20 22 22 25
Number of Employees 25 22 22 20 17 19 20 19 20 20
Intercontinental Bank has had a stable number of employees during the period; however, Bank of Coral Gables has increased its employees even though the bank’s performance is not good. This is a non-sense because, generally, management decides to reduce the workforce when business cannot perform the way they are intended. RATIO ANALYSIS Bank of Coral Gables Intercontinental Bank
2011-1Q 2010-1Q 2010 2009 2008 2011-1Q 2010-1Q 2010 2009 2008
Return on Assets 3.81% -21.31% -4.27% -1.01% 38.14% -6.67% 10.31% -3.09% 19.81% 0.77%
Return on Equity -35.05% -23.28% -49.88% -38.53% 2.99% 4.64% 6.90% 6.00% 6.30% 6.79%
Efficiency Ratio 70.68% 62.81% 69.63% 65.99% 61.01% 70.68% 62.81% 69.63% 65.99% 61.01%
Loan Charge Offs

3.60% 2.53% 3.34% 2.62% 1.16% 1.06% 1.57% 1.17% 1.22% 0.54%
Assets per Employee (millions)

7.27% 7.41% 7.51% 7.37% 6.15% 7.27% 7.41% 7.51% 7.37% 6.15%
Number of Employees 25 22 22 20 17 19 20 19 20 20

RATIO ANALYSIS Peer Group 6

2011-1Q 2010-1Q 2010 2009 2008

Return on Assets 1.10% 3.91% 0.72% 4.85% 8.66%
Return on Equity 2.67% 1.40% 0.73% -4.08% 3.40%
Efficiency Ratio 128.49% 114.91% 116.84% 102.00% 63.58%
Loan Charge Offs 2.15% 1.97% 2.08% 1.94% 1.48%
Assets per Employee (millions) 5.81% 6.36% 6.90% 7.93% 9.43%

Return on Assets
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 7.7000000000000002E-3 0.1981 -3.09E-2 0.1031 -6.6699999999999995E-2 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 0.38140000000000002 -1.01E-2 -4.2700000000000002E-2 -0.21310000000000001 3.8100000000000002E-2 Peer Group 6 2008 2009 2010 2010-1Q 2011-1Q 8.6599999999999996E-2 4.8500000000000001E-2 7.1999999999999998E-3 3.9100000000000003E-2 1.0999999999999999E-2
Return on Equity
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 6.7900000000000002E-2 6.3E-2 0.06 6.9000000000000006E-2 4.6399999999999997E-2 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 2.9899999999999999E-2 -0.38529999999999998 -0.49880000000000002 -0.23280000000000001 -0.35049999999999998 Peer Group 6 2008 2009 2010 2010-1Q 2011-1Q 3.4000000000000002E-2 -4.0800000000000003E-2 7.300000 0000000001E-3 1.4E-2 2.6700000000000002E-2
Efficiency Ratio
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 0.61009999999999998 0.65990000000000004 0.69630000000000003 0.62809999999999999 0.70679999999999998 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 0.63580000000000003 1.02 1.1684000000000001 1.1491 1.2848999999999999 Peer Group 6 2008 2009 2010 2010-1Q 2011-1Q 0.70499999999999996 0.78400000000000003 0.75660000 000000005 0.76759999999999995 0.75860000000000005
Loan Charge-Offs
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 5.4000000000000003E-3 1.2200000000000001E-2 1.17E-2 1.5699999999999999E-2 1.06E-2 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 1.1599999999999999E-2 2.6200000000000001E-2 3.3399999999999999E-2 2.53E-2 3.5999999999999997E-2 Peer Group 6 2008 2009 2010 2010-1Q 2011-1Q 1.4800000000000001E-2 1.9400000000000001E-2 2.07999999999999 99E-2 1.9699999999999999E-2 2.1499999999999998E-2
Assets per Employee (millions)
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 6.1499999999999999E-2 7.3700000000000002E-2 7.51E-2 7.4099999999999999E-2 7.2700000000000001E-2 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 9.4299999999999995E-2 7.9299999999999995E-2 6.9000000000000006E-2 6.3600000000000004E-2 5.8099999999999999E-2 Peer Group 6 2008 2009 2010 2010-1Q 2011-1Q 5.2200000000000003E-2 5.4600000 000000003E-2 5.3900000000000003E-2 5.5599999999999997E-2 5.5100000000000003E-2
Number of Employees
Intercontinental Bank 2008 2009 2010 2010-1Q 2011-1Q 20 20 19 20 19 Bank of Coral Gables 2008 2009 2010 2010-1Q 2011-1Q 17 20 22 22 25

IV. Regulatory Actions

Bank of Coral Gables Intercontinental Bank

IV. Regulatory Enforcement Actions
	Bank A		Bank B

Bank of Coral Gables has had a Consent Order (FDIC-09-690b OFR 0697-FI-12/09) from the Federal Deposit Insurance Corporation established on February 11, 2010.

Intercontinental Bank has not had any Cease and Desist Order, Memos of Understanding, or any other regulatory enforcement actions against it. Search results on the FDIC show no results.

V. SWOT Analysis

V. SWOT Analysis
Bank A Bank B

Bank of Coral Gables Intercontinental Bank

Strengths	Good branch location	Increasing consumers loans that usually have higher rates Low exposure to subprime loans Stable source of income from investment Stable return on equity Low efficiency ratio Good branch location
Weaknesses	Middle exposure to commercial loans Hight exposure to subprime loans Increasing allowances to loans losses Decreasing loan’s portfolio Low return on assets Major drop in retained earnings Low return on equity	Middle exposure to commercial loans Dependence on federal funds purchases Website is not up to date and offers little information
Opportunities	Adopt new services fees as manner to increase non-interest income Reduce non-interest expenses	Strong investment in bonds could be converted to cash in order to funding futures loans when interest rate increases and overall financial situation improves
Threats	State of Florida has had a slow recuperation of employment and real state market Middle-to-high concern about liquidity in the future term	State of Florida has had a slow recuperation of employment and real state market Moderate concern about liquidity in the future term

VI. Conclusions and VII. Biblio

VI. Conclusion and Decision 1. Would you place a personal deposit of $1 million or more in these two banks? After careful analysis of Bank of Coral Gables and Intercontinental Bank, I have decided that I would not place a deposit of $1 million in any of the two banks. After reviewing the financial statements for both institutions, I found serious liquidity problems with Bank of Coral Gables. Aditionally, this bank have a negative exposure to commercial and subprime loans, which has rocketed its allowances for loans losses. All mentioned above has contributed to a decreasing loan’s portfolio, return on assets, and a major drop in retained earnings. Both banks have also experienced a decline in their total deposits wich can be attributed to their inability to maintain customers. Finally, Intercontinental Bank has needed in a regular basis of federal funds purchases to operate. 2. Would you invest $500,000 in these two banks? I have decided that I would not place an investment of half a million in any of those banks. The reasons to avoid becoming a shareholder are similar to those mentioned on the first response to avoid becoming a depositor. Equally, from a risk-return perspective, there is not strong economic expectations for capital gains or dividens on being an owner on those financial institutions. Additionally, I have taken on account the opportunity cost associated with this investment. Right now, in my humble opinion, there are more secured and profitable ways to invest such amount of money, in other more solid banks for instance. 3. If you were a member of the Board of Directors of a third bank and you sat on that Bank’s Credit Committee, would you grant a $1 million line of credit for Overnight or Term Federal Funds to these two banks? If I were a member of the Board of Directors of a third bank, I would not grant to Bank of Coral Gables a $1 million line of credit for overnight after considering the financial, liquidity and efficiency ratios for this bank. However, I will seriously ponder to offert a federal fund purchase to Intercontinental Bank if the expected return on the operation is according to its risk level. My decision relay on the study of the Intercontinental’s operations. This bank has been borrowing for the last three years this kind of funds, and so far it looks to being accomplish its obligations. Additionally, from an financial perspective, it seems to be a more solid institution than Bank of Coral Gables because Intercontinental has a strong position on bonds, and a consistent flow of income. Finally, Intercontinental have a lower number of bad loans; consequently, it is expected to suffer less defaults on their mortgages than Bank of Coral Gables. VII. Bibliography Bank of Coral Gables Website:

http://www.bankofcoralgables.com/index.asp

Intercontinental Bank Website: http://www.intercontinentalbk.com/
Consent order for Bank of Coral Gables:

http://www.fdic.gov/bank/individual/enforcement/2010-02-11

FDIC Bank of Coral Gables Individual Bank Information:

https://cdr.ffiec.gov/public/Reports/UbprReport.aspx?rptCycleIds=64,60,63,58,52&rptid=283&idrssd=3447455

FDIC Intercontinental Bank Individual Bank Information:

https://cdr.ffiec.gov/public/Reports/UbprReport.aspx?rptCycleIds=64,63,58,52&rptid=283&idrssd=3122828

Federal Reserve Bank of St. Louis’ banking structure analysis website:

http://cassidi.stlouisfed.org/institutions/3887323

http://www.bankofcoralgables.com/index.asp
http://www.intercontinentalbk.com/
http://www.fdic.gov/bank/individual/enforcement/2010-02-11
https://cdr.ffiec.gov/public/Reports/UbprReport.aspx?rptCycleIds=64,60,63,58,52&rptid=283&idrssd=3447455
https://cdr.ffiec.gov/public/Reports/UbprReport.aspx?rptCycleIds=64,63,58,52&rptid=283&idrssd=3122828
http://cassidi.stlouisfed.org/institutions/3887323

Sheet1

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