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Colorado State Bank & Trust Analysis

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Bank Uniform Bank Report (UBPR) Analysis for Colorado State Bank & Trust for 12/31/2009 to 12/31/2010

Sajjan Shrestha

Finance 3600

  1. Introduction for Colorado State Bank & Trust Analysis

Colorado State Bank & Trust, in Denver, Colorado is large commercial bank (Peer Group 2, Insured Commercial banks having assets between 1 billion and 3 billion) with total assets of $1,378,228 million and 1,203,323 million in deposits, established in October 1908. Colorado State Bank & Trust is primarily a real estate lender, with about 51.30% of its loans real estate loans, 23.83% commercial and industrial loans, and 5.05% loans to individuals as of 12/31/2010.  

  1. Profitability Trend and Peer Comparison Analysis

  1. Trend and Peer Analysis of OROA.

Colorado State Bank & Trust OROA was lower than its peers, as they have 0.00% in 2010 and had a negative OROA of (0.55%) in 2009. This was due to IR%, PLL% and IE% all decreasing from previous years while NIM% rose by 7 basics points. OROA improving from negative to 0.00% was due to improvements to NIM%, and a decrease of Burden and PLL%. The Burden decreased due to slight increase in NIM% and NIE%.  The NIM% improved in 2010 because of the large fall of IE% of 60 basis points verses a smaller fall of 53 basics points for IR%, which is a rise of about 7 basis points for the NIM%. The Burden decreased by 49 basis points while NIE% dropped by 35 basics points, which net increase in NIR% by 14 basics points. The PLL% decreased by 15 basics points.

ROA Analysis

12/31/2010

12/31/2009

Colorado State  Bank & Trust

PG2

Colorado State Bank & Trust

PG2

IR %

2.72 %

4.52 %

3.25%

4.87 %

IE %

0.96 %

1.08 %

1.56%

1.57%

NIM %

1.76%

3.42%

1.69%

3.26%

NIR %

1.29%

0.95%

1.15%

0.93%

NIE %

2.74%

2.95%

3.09%

3.12%

Burden

1.45%

2.00%

1.94%

2.19%

PLL %

0.26%

0.97%

0.41%

1.50%

Realized Gain/Loss Sec.

(0.06)%

0.06%

0.10%

0.03%

OROA

0.00%

0.56%

(0.55%)

(0.37)

Colorado State Bank & Trust has a lower IR% that its peers, which causes the NIE% and IE% to be also lower compared to PG2. The PLL% is lower than its peers which is why the Burden% is also lower than the PG2. Each year Colorado State Bank & Trust has a much lower PLL% than its peers. It seems Colorado State Bank & Trust NIR% is always higher than its peers as well.        

    B. Trend and Peer DuPont ROE Analysis

Colorado State Bank & Trust has a has a much lower ROE and ROA in 2010 than PG2 while we can see there was negative ROE for the entire peer group in 2009 which was probably due to its recovery from the market crisis. The EM is much higher for Colorado State Bank & Trust has a compared to its peers while its Tier 1 Lev.Capital and AU is lower than its peers. The ROE rose in 2010 due to higher ROA, and higher EM. This also led to a slight increase in AU while a significant rise in NPM. ROA went up with with NPM increase.

ROA Analysis

12/31/2010

12/31/2009

Colorado State  Bank & Trust

PG2

Colorado State Bank & Trust

PG2

ROE

0.87 %

3.73 %

-4.17%

-4.45%

ROA

0.06%

0.33%

-0.29%

-0.37%

EM

14.59x

         11.29x

          14.37x

12.03x

Tier1Lev.Capital

6.85%

8.86%

6.96%

8.31%

NPM

1.49%

6.03%

-6.59%

-6.37%

AU

0.0401x

0.0547x

0.0440x

0.0580x

  C. Trend and Peer DuPont ROA Analysis

Colorado State Bank & Trust ROA was lower than its peers in 2010 which due to lower NPM and AU compared to its peers. Some weakness shown is the EM is higher than average while the Tier 1 Lev Capital is slightly lower than its peers. Its financial leverage, EM is significantly higher than its peers and it rose in 2010. Colorado State Bank has no trouble managing its costs, due to lower IE% and PLL%.

D. NIM analysis: Asset Rate & Mix Trends and Peer Analysis

Yield % on or Cost % of

12/31/2010

12/31/2009

Colorado State  Bank & Trust

PG2

Colorado      State  Bank & Trust

PG2

Total  Loans & Leases (TE)

4.54

5.69

4.47

5.73

Cost of Interest-Bearing Funds

1.11

1.32

1.79

1.91

By Loan/Asset Type:

Real Estate

5.14

5.61

4.95

5.67

Commercial & Industrial

2.59

5.57

3.37

5.71

Individual (Consumer)

5.20

7.32

4.88

7.38

Investment Securities

4.58

3.54

4.54

4.33

Colorado State Bank loan rate increase in 2010 whiles its peers loan rate decreased. Its Cost of Interest-Bearing Funds, interest rate on liabilities, decreased by 68 basics points compared to a decrease in 59 basics points for PG2. In both years, Colorado State Bank & Trust has a much lower average loan rate than its peers while also maintaining a lower. In terms of type of loans, Colorado State Bank & Trust loan rates are much lower Real Estate, Commercial/Industrial, and Individual in both 2009 and 2010. Colorado State Bank and trust has higher average yield % on its investment securities that its peers in both years.

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