Commercial Banks

Commercial Banks - Support lending activities with borrowed...

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Commercial Banks The largest category of DIs is commercial banks. 1 FDIC Graph Book
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Commercial Banks Commercial banks have the most diversified balance sheet, with the asset mix dependent on bank size. 2
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Types of Commercial Banks Community Regional / Superregional Money Center 3
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Community Banks Hold less than $1 billion in assets. Small in size and conduct most business locally through main office and small branch network. Represent 91% of banks holding 11% of industry assets. Size of segment is shrinking. Specialize in residential mortgage, small business, and consumer lending. Make decisions based on relationships and understanding of local market). 4
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Regionals / Superregionals Hold more than $1 billion in assets. Also engage in commercial lending, trust, and correspondent banking services: Check clearing Foreign exchange trading Participation in large loan and security issuances Maintain extensive retail networks that ‘fund’ the bank.
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Unformatted text preview: Support lending activities with borrowed funds in addition to deposits (through Fed Funds market). Engage in local, state, and national transactions through centralized operations and decision-making. 5 Money Center Banks 6 Engage in global transactions. Located in money center locations with no or few branch locations. Bank of New York Mellon, Deutsche Bank (Bankers Trust), Citigroup, J.P. Morgan Chase, HSBC Bank USA Fund lending activities with borrowed funds. e.g.: Bank of America is the nations second largest bank, but is not a money center bank; headquartered in North Carolina, it is a net supplier of funds in the Fed Funds market. Bank Capital vs. Other Industries 7 Different industries have varying needs for capital. Banks operate with a small amount of capital....
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This note was uploaded on 01/26/2012 for the course FIN 4620 taught by Professor Patriciarobertson during the Spring '12 term at Kennesaw.

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Commercial Banks - Support lending activities with borrowed...

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