MT Bank - Understanding Whats Important - Free Essay Example

MT Bank Table of Contents Abstract History Industry Assessment SWOT Analysis Strengths Weaknesses Opportunities Threats Stakeholder Analysis Financial Analysis BCG Matrix Recommendations.15 Works Cited16 Tables Table 1 Top 50 Commercial Banks (USA) Table 2 FDIC Ratios Table 3 MT Competitors Figures Figure 1- Loans to Assets Ratio Figure 2 Asset Growth Figure 3 Loan Growth Figure 4 BCG Matrix..14 Abstract For my final project I have chosen to examine MT Bank. It will be of importance to examine the industry as whole, perform a SWOT analysis, and review financial statements. Through examining each of these factors a clearer understanding of how MT Bank operates in the commercial banking industry will be generated. Thereafter, a conclusion will be drawn on how MT Bank should pursue their future in the banking industry. History MT Bank was founded in 1856 in Buffalo, NY as the Manufacturers and Traders Bank by Pascal Pratt and Bronson Rumsey. By the end of this decade the bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s ownership increased from 13 founding stockholders to over 145, all of which received a primary dividend of four percent. Fast forwarding to the beginning of the twenty first century MT Bank began acquiring not only land and buildings throughout Buffalo, NY but also other banks. The 1970à ¢Ã¢â€š ¬Ã¢â€ž ¢s ushered in a new ear for MT Bank, this began with the hiring of a new chairman and CEO; Robert Wilmers. Currently, Wilmers is still the CEO of MT Bank and has been able to perpetuate the tradition of long standing success. Through continued success MT has been able to acquire other banks and expand its reach into Pennsylvania, Virginia, and Washington DC. By 2011 the bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s assets reached nearly $80 Billion making it the 24th largest bank in the United States. Industry Assessment The industry that MT currently operates is the commercial banking industry. The commercial banking industry has seen much change over the past century, this change has predominately occurred from government intervention. The basic aim of government regulation is to ensure that firms are able to be competitive while also preventing market failures. These include natural monopolies, excessive competition, and economic rents. To help with this overall goal the government tends to regulate in two facets; economic and social. An economic regulation deals with the government having a direct or indirect control over the firms in an industry. This is beneficial because it limits markets with monopolies from raising prices too high which would result in unfair payments made by their customers (Conte Karr, 2001). The social aspect of government regulations is seen in antitrust laws. These are laws that prohibit practices or mergers that would ultimately lead to the degradation of competitio n. These regulations play an important part in commercial banking because they are directly correlated to preventing market failures (Conte Karr, 2001). Commercial banking is defined as a financial institution that provides services, such as accepting deposits, giving business loans and auto loans, mortgage lending, and basic investment products like savings accounts and certificates of deposit (Commercial Banking, 2014). As of September 2013 there are currently 539 commercial banks with assets over $1 Billion. Of the 539 commercial banks the top 20 banks currently hold 31% market share and the top 50 banks hold 41% market share. Furthermore, the top 20 banks currently hold 59% of totals assets and the top 50 banks hold 70% of all totals assets (Census, 2007). In the commercial banking industry market share and total assets have become the major focus. This most closely aligns with the mantra of the maturity stage of the industry life cycle, firms in this stage are concerned wit h market share. Potential new entrants find these markets unattractive because of high barriers to entry and first mover advantages. Table 1 Top 50 Commercial Banks (USA) Top 50 Commercial Banks (USA) 1 JPMORGAN CHASE BK NA/JPMORGAN CHASE CO 2 BANK OF AMER NA/BANK OF AMER CORP 3 CITIBANK NA/CITIGROUP 4 WELLS FARGO BK NA/WELLS FARGO CO 5 U S BK NA/U S BC 6 PNC BK NA/PNC FNCL SVC GROUP 7 BANK OF NY MELLON/BANK OF NY MELLON CORP 8 CAPITAL ONE NA/CAPITAL ONE FC 9 STATE STREET BTC/STATE STREET CORP 10 T D BK NA/TD US P C HOLD ULC 11 HSBC BK USA NA/HSBC NORTH AMER HOLD 12 BRANCH BKGTC/BBT CORP 13 SUNTRUST BK/SUNTRUST BK 14 FIA CARD SVC NA/BANK OF AMER CORP 15 FIFTH THIRD BK/FIFTH THIRD BC 16 CHASE BK USA NA/JPMORGAN CHASE CO 17 REGIONS BK/REGIONS FC 18 GOLDMAN SACHS BK USA/GOLDMAN SACHS GROUP THE 19 UNION BK NA/UNIONBANCAL CORP 20 RBS CITIZENS NA/RBS CITIZENS FNCL GRP 21 NORTHERN TC/NORTHERN TR CORP 22 ALLY BK/ALLY FNCL 23 BMO HARRIS BK NA/BMO FNCL CORP 24 KEYBANK NA/KEYCORP 25 MORGAN STANLEY BK NA/MORGAN STANLEY 26 MANUFACTURERS TRADERS TC/MT BK CORP 27 CAPITAL ONE BK USA NA/CAPITAL ONE FC 28 SOVEREIGN BK NA/SANTANDER HOLDS USA 29 DISCOVER BK/DISCOVER FS 30 COMPASS BK/BBVA COMPASS BSHRS 31 BANK OF THE WEST/BANCWEST CORP 32 COMERICA BK/COMERICA 33 HUNTINGTON NB/HUNTINGTON BSHRS 34 DEUTSCHE BK TC AMERICAS/DEUTSCHE BK TR CORP 35 WELLS FARGO BK S CENT NA/WELLS FARGO CO 36 FIRST REPUBLIC BK/ 37 FIRST NIAGARA BK NA/FIRST NIAGARA FNCL GROUP 38 BOKF NA/BOK FC 39 BANK OF AMER CA NA/BANK OF AMER CORP 40 CITY NB/CITY NAT CORP 41 SYNOVUS BK/SYNOVUS FC 42 FIRST TN BK NA/FIRST HORIZON NAT CORP 43 FIRSTMERIT BK NA/FIRSTMERIT CORP 44 ASSOCIATED BK NA/ASSOCIATED BANC-CORP 45 EAST W BK/EAST W BC 46 FROST BK/CULLEN/FROST BKR 47 COMMERCE BK/COMMERCE BSHRS 48 FIRST-CITIZENS BTC/FIRST CITIZENS BSHRS 49 SILICON VALLEY BK/SVB FNCL GRP 50 BARCLAYS BK DE/BARCLAYS DE HOLDS LLC (FRB, 2014) Mention previously the goal of regulation in the commercial banking industry is to provide a competitive market, this prevents total dominance by a few firms. However, the banking industry is associated with high barriers to entry for new banks because of the regulatory restrictions associated with charters and high costs of capital. High barriers to entry are also associated with markets that are unfavorable to enter because established firms have an exponential advantage. As shown from the previous empirical evidence this industry is highly concentrate in both market share and total assets. In an attempt to reduce barriers to entry the Riegle-Neal Interstate Banking and Branching Efficiency Act was passed. This act changed interstate banking laws for both bank holding companies and individual banks. BHCs and individual banks were given the ability to merge with other banks located in different states. In theory this greatly reduced barriers to entry, however, in pr actice it potentially help top banks become larger and more dominant. SWOT Analysis The SWOT analysis of MT bank will help to evaluate the institutions strengths, weaknesses, opportunities, and threats. Following the conclusions of the analysis will allow for recommendations that leverage MT Banks strengths to take advantage of potential business opportunities. Additionally, this conclusion will allow for a better understanding of operational weaknesses to contest threats to prospective growth. Strengths MT bank has garnered much strength since its founding in 1856. It has grown into one of the countries thirty largest banks with roughly $80 billion in assets. In addition the bank boasts 700 branches and ATMs in 1,500 different locations greatly extending is banking power (MT Bank Corp, 2014). Its growth can be attributed to the acquisition of banks in upstate New York, eastern Pennsylvania, Washington D.C., and the Baltimore region. Market dominance in these select regions has allowed MT to not only create a competitive advantage but also sustain an advantage. Another key strength to MT Bank is the services the bank can offer. To this point we have only mentioned MTà ¢Ã¢â€š ¬Ã¢â€ž ¢s role in the commercial banking industry. However, MT offers services in retail and investment banking. Weaknesses Not only has MT Bank created a competitive advantage in the areas it serves, it has also created a customizable approach to banking that customers love. However, the scope of coverage is limited to eight states which ultimately means the bank has a relatively small to negligible service area in comparison to other banks. MT Bank service area can be seen in above picture. This scenario could sway potential new customers to choose another bank which has a greater physical presence throughout the United States. Opportunities In recent years MT bank has created many opportunities that have positively affected the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s position. Since 2006 MT has acquired over 130 brick and mortar banking locations, many of which are outside the state of New York. Along with the purchase of physical brick and mortar locations MT Banks has purchased other commercial banks such as Wilmington Trust. and Hudson City Bancorp (Rochester, 2014). This was a strategic move that has allowed MTà ¢Ã¢â€š ¬Ã¢â€ž ¢s total assets to increase greatly over the past five years. Since the year 2005, which is a significant year, MT has increased their total assets by nearly 50% (MT Bank Corporation, 2014) Lastly, MT Bank is not only located in the United States but has a location across the border in Toronto, ON. According to bank President Mark Czarnecki, à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦our understanding of cross-border commerce, along with decades of experience serving Canadian businesses operating in the U.S., makes Ontario an ideal location for MTs first international commercial bank office (MT Bank, 2010).à ¢Ã¢â€š ¬Ã‚  This branch will not only allow MT to serve a large number of US-based companies operating Canada but will allow MT to differentiate itself from the competition. Threats Since the financial crisis of 2008 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 2009 banking laws and regulations have become more stringent. Regulatory compliance poses an undoubtable burden on MT Bank. Regulatory compliance is also positively correlated to higher cost. One such regulation is Dodd-Frank Act, this act has mandated that banks need to keep higher ratios of capital on hand. Therefore, this limits MTà ¢Ã¢â€š ¬Ã¢â€ž ¢s ability to expand into other regions. Secondly, MT Bank faces other external threats such as the loss of their sustained competitive advantage. This loss can occur because of their small geographical coverage area. Other banks, through acquisitions and mergers, could open branches in similar locations. Thus, this would decrease their market share and potentially make them less valuable. Stakeholder Analysis The stakeholder analysis aims to evaluate the stakeholders of MT Bank. The stakeholders can be broken down into three major groups; Customer both potential and current, investors, and management. Following figure, the interest/power grid allows us to plot current and potential customers in the quadrant à ¢Ã¢â€š ¬Ã…“keep satisfied.à ¢Ã¢â€š ¬Ã‚  The customers of MT Bank are responsible for driving profits without them the bank would be forced to close its doors. The group of investors and management can be grouped into the quadrant labeled keep informed. Keeping investors and especially management informed allows the company to make the best possible decisions. Financial Analysis Table 2 FDIC Ratios Ratio Measures of Bank Performance Identification of Variable What the Variable Measures Loans-to-assets ratio Liquidity and risk. The higher the ratio, the greater the amount of the bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s total portfolio that is subject to default risk Return on Assets (ROA) The bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s profitability. Low ROA may encourage risk taking by the bank. High ROA may indicate high-risk lending to increase profits Asset growth from previous year Risk of growth Loan growth from previous year Risk of growth Salary expenses per employee Managementà ¢Ã¢â€š ¬Ã¢â€ž ¢s control of expenses Interest on loans and leases to total loans and leases (interest yield) The average income of loans. High yields might indicate that the bank is originating high-risk loans. Interest and fee income to total loans and leases (interest fees to loans) Income. The addition of fees to the variables may catch firms that are loading up on fee income. Operating expenses to total expenses Managementà ¢Ã¢â€š ¬Ã¢â€ž ¢s control of expenses. Higher expenses are assumed to be indicators of loose control. (FDIC) The success of any bank depends on several factors which involve many different aspects of the balance sheet. The FDIC has created (Table 2 FDIC Ratios) to help explain the performance of a bank in regard to the balance sheet. Although the entire list is used by the FDIC to ensure a thorough understanding of a bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s performance, not all of these ratios and years are able to be used due to a lack of information. The areas that we will examine in our financial analysis are the total loans to assets ratio, the asset growth from the previous year, the loan growth from the previous year, and the return on assets. To aid in this analysis we will compare MT to the average US bank, and the average New York bank. Figure 1- Loans to Assets Ratio (Mergent Online) (FDIC) The total loans to assets ratio helps to explain the bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s liquidity and risk. The higher the ratio the more likely a banks is to default. Figure (Figure 1- Loans to Asse ts Ratio) upon comparison shows that MT is more likely to default. Although this is an improbable scenario, MT Bankà ¢Ã¢â€š ¬Ã¢â€ž ¢s loan to assets ratio is the riskiest The asset growth and loan growth from the previous year are two ratios that deal with the overall risk of growth. The figures of (Figure 2 Asset Growth Figure 3 Loan Growth) show this comparison. During times of economic prosperity, such as the recovery and peak stage of the economic business cycle, MTà ¢Ã¢â€š ¬Ã¢â€ž ¢s loans and assets increase greatly. However, during downturns in the economy, such as a recession or trough, MTà ¢Ã¢â€š ¬Ã¢â€ž ¢s loans and assets decrease. Furthermore, over the long run MT Bank has experience the best overall growth in loans and assets from the previous years. Figure 2 Asset Growth (Mergent Online) (FDIC) Figure 3 Loan Growth (Mergent Online) (FDIC) 1 Lastly, we examine MTà ¢Ã¢â€š ¬Ã¢â€ž ¢s return on assets. This ratio helps to explain the bankà ¢Ã¢â€š ¬ â„ ¢s profitability. Low ROA may encourage risk taking by the bank and high ROA may indicate high-risk lending to increase profits (FDIC). MT has experience an average ROA of 1.20%, for the banking industry a ROA of slightly higher than 1.5% is optimal (Loth, 2009). BCG Matrix The above BCG Matrix analyses MT Bank and its four closest regional competitors. From the data we can see that that MT is ranked in the à ¢Ã¢â€š ¬Ã…“question markà ¢Ã¢â€š ¬Ã‚  quadrant. It has both a small overall market share and relative markets share. Businesses that are located in this quadrant require vast resources to grow, but whether they will succeed and move into the star quadrant is unknown. Table 3 MT Competitors MT Competitors BCG Matrix Brands Revenues (Billions) Banks Market Share Relative Market Share (RMS) Market Growth Rate MT Bank $4.35 5.18% 0.0738 6.52% PNC $15.30 18.23% 0.2595 12.50% HSBC $58.96 70.26% 1.0000 5.36% First Niagara $1.35 1.61% 0.0229 12.18% KeyCorp $3.96 4.72% 0.0672 0.51% However, of the five banks compared MT has one of the best market growth rates. Additionally, the poor placement of MT Bank on the BCG Matrix can be explained. Two of the banks, HSBC and PNC, currently reside in the top twenty banks nationally. As mentioned previously banks in the top twenty control 59% of total assets and 31% of the market share, thus, these two banks adversely skew the data. Furthermore, MT Bank is mid-market regional bank that competes on a regional (North Eastern States) level not on a national level. Figure 4 BCG Matrix Recommendations For MT Bank to remain successful they should concentrate on two areas of focus. The first area of focus should be on financial ratios. As stated previously, financial ratios are important in understanding the overall performance of the bank. Even though MT was one of the best performing banks through the Great Recession of 2008 they should strive to lower their loan to asset ratio. Their higher than average ratio can lead to the ultimate failure of MT. Secondly, the bank should focus of mergers and acquisitions to help maintain their competitive advantage. MTà ¢Ã¢â€š ¬Ã¢â€ž ¢s current small market size puts them at a potential disadvantage in comparison to their competition. Acquiring other banks would allow them further convey their idea of community banking. This gives customers the personal touch that many large commercial banks are not able to give. The examination of MT Bank versus its competitors at both a national and state level is important in understanding the banks s uccess. MT Bank has succeeded in out performing their competition through not only good economic times, but the same bad ones that have led to the failures of their competition. MTà ¢Ã¢â€š ¬Ã¢â€ž ¢s success is garnered in their mantra of à ¢Ã¢â€š ¬Ã…“community bankingà ¢Ã¢â€š ¬Ã‚  and their ability to exploit their competitive advantage (Throwback, 2014). Works Cited Census Bureau Homepage. Census Bureau Homepage. N.p., n.d. Web. 03 Mar. 2014. Commercial Bank. Investopedia. N.p., n.d. Web. 05 Mar. 2014. Conte, C., Karr, A. R. (2001). An outline of the U.S. economy. Washington, D.C.: U.S. Dept. of State, International Information Programs. FDIC: Statistics on Depository Institutions. FDIC: Statistics on Depository Institutions. N.p., n.d. Web. 05 Mar. 2014. FRB: Large Commercial Banks June 30, 2013. FRB: Large Commercial Banks June 30, 2013. N.p., n.d. Web. 05 Mar. 2014. Loth, Richard. Financial Ratio Tutorial à ¢Ã¢â€š ¬Ã…“ROAà ¢Ã¢â€š ¬Ã‚  Retrieved October 23, 2009, from https://www.investopedia.com/university/ratios/profitability-indicator/ratio3.asp MT Bank Corporation About MT Bank Corporation. MT Bank Corporation About MT Bank Corporation. N.p., n.d. Web. 05 Mar. 2014. MT Bank Corporation MT Bank Approved to Open Canadian Commercial Banking Branch. MT Bank Corporation MT Bank Approved to Open Canadian Comme rcial Banking Branch. N.p., 07 June 2010. Web. 05 Mar. 2014. Rochester Business Journal. MT Acquires Delaware Bank for $351 Million. N.p., n.d. Web. 05 Mar. 2014. Throwback Approach Keeps Wilmers, MT on Top. American Banker RSS. N.p., n.d. Web. 05 Mar. 2014.

Explicating Longfellows Christmas Bells - Literature Essay Samples

Henry Wadsworth Longfellow was a committed abolitionist who viewed slavery as an abomination and the Civil War as a just cause for the Union, as long as it resulted in an end to slavery and subsequent reconciliation between the North and South. â€Å"Christmas Bells† references the Civil War directly as a result of a personal attachment: Longfellow was stimulated to write the poem after his son was wounded during battle after enlisting against his father’s will. The legend is that Longfellow actually composed the poem on Christmas Day, 1863 although it would not be published until just a few months before the surrender of Gen. Robert E. Lee to Gen. Ulysses S. Grant. Publication took place in a literary magazine for children titled Our Young Folks. The speaker begins by announcing that on Christmas Day he could hear bells ringing out a tune that was a familiar holiday carol expressing goodwill to men and hoping for peace on earth. The narrator is really the only official character in the poem, although he remains unnamed and unidentified. One may assume he is intended to represent the thoughts and feelings of the poet, but the anxiety that he is feeling certainly seems to imply a greater universality. Not to be confused with representing the universal spirit of Man, however. Context does provide some clues as to identity of the speaker: he is alive during the Civil War and he is a Northerner and he is appalled by the idea that waging war for the purpose of protecting the institution of slavery. The opening lines of the poem set the stage: it is Christmas Day at a point in time when bells in the belfries of local townships and villages routinely rang familiar Christmas songs. The peal of the carols played on bells appeals to the narrator’s own personal perspective on the war and reflection on how so many bell towers across all of Christendom had been ringing out for the same desires and universal wishes. â€Å"Of peace on earth, good-will to men!† becomes the poem’s constant refrain and its most effective utilization of the parallel construction to lend it meaning coherence throughout. Indeed, this one single line is repeated no less than seven times and probably not by coincidence, the poem is also composed of exactly seven stanzas. And, yes, every stanza draws to a close with this refrain. The sound of bells ringing out carols of goodwill continue from night into day until they are first merely interrupted and then eventually drowned out by another familiar sound that has been heard ringing out by many Americans across their vast country: â€Å"Then from each black, accursed mouth / The cannon thundered in the South.† The war conducted on the battlefield has the effect of an earthquake ripping asunder half a continent and creating a division that brings on feelings of forlorn despair and hopeless despondency which inevitably forces the narrator to bow his head and accept at last the inescapable and undeniable truth that there is no peace on earth because, when all is said and done, â€Å"hate is strong, And mocks the song Of peace on earth, good-will to men! The rising thunder of war meant to end the abominable national shame of slavery has made an absolute mockery of those songs extolling the virtue and even the mere existence of peace on earth and goodwill among men. The narrator’s bitter awakening to the reality of what Christmas Day means in a country torn apart by war with one side actually willing to die to protect laws legislating bondage of others leaves him nearly broken. Just one heartbreaking step from raising the white of flag surrender and handing over the spoils of victory to everlasting despair, however, peals of the bells being rung again is louder than ever and a force greater than even the thunder of ammunition. As if by some Christmas miracle, right at the very moment before the Narrator hands over his white flag with an implicit acceptance of that the hatred stemming from his conquerors to the South truly is enough to cause songs extolling peace and goodwill to be viewed as mere mockeries forever more, he hears the bells ringing like they never have never run before on Christmas Day. It is monumental sound and profound in its meaning: a euphonious assertion that God is neither dead nor sleeping and eventually—with His help, one assumes—Wrong will fail and Right will prevail and there will be peace on earth with goodwill toward men. While the subject of the poem is whether peace on earth and goodwill to men is merely a hopeless dream constructed on the shaky foundation of oblivion to the true nature of man or is something genuinely within the grasp of the species, the only other well delineated character of the poem are those men of bad will who obstruct the move toward peace and serenity. This is a collective character rather than an individualized entity, of course, and that collective agency in charge of poisoning even the dream of good wood are expressly described as those firing off their cannons in the South. They are every soldier in gray uniform who flooded the Civil War battlefields in pursuit of the preservation of odious politicians using them as pawns in their bid to forever threaten not just the reality, but the very concept of peace and goodwill ever having the opportunity to nurture and grow in this still young country build on such noble sentiments liberty and freedom. About a decade after Longfe llow completed the poem, it was adapted into lyrics to accompany a tune that has that since become one of the familiar traditional Christmas carols heard throughout the holiday season. The title was slightly modified from the original to differentiate the song from the poem. â€Å"I Heard the Bells on Christmas Day† has since been covered by artists that include Harry Belafonte, Elvis Presley Bette Midler and the ska-punk band MU-330, thus succeeding in two noble distinctions: making Henry Wadsworth Longfellow one of the most successful Christmas carol lyricists of any American poet and proving that his narrator was right not to give up hope even in his darkest hour.