1. Brief History of Gilmore Bank
Gilmore bank, a California State bank established by Earl Bell Gilmore who is considered a legendary entrepreneur who is well known for what he contributed for his city as well for his country. Earl Gilmore and his father made big achievements by building; the largest petroleum company in the western United states, Gilmore baseball field, and Gilmore stadium. He started the bank in 1955 by recruiting some of the best financial talent of that time. With his experience, he wanted to make those small businesses such as the mom-and-pop stores to be recognized and have fair competition with the other companies or stores. He wanted to let everyone to know that Gilmore bank was built to be conservative, careful and conscientious which means serving businesses large and small. Gilmore Bank is the place where people relied greatly on because it was key that unlocked some of doors which they couldn’t open. Back then, Gilmore Bank was the place where local residents were able to get their first auto loan, and also where business depended greatly on financial assistance. Gilmore Bank is still a place for customers to rely on, to this day Gilmore Bank is still doing what they used to do in the past; they are still considered family business that is guided by entrepreneurial spirit, vision, and dedication which allow them to produce a high level of services to their customers. Gilmore Bank with around $180 million in assets and two locations that are considered community banks that fund themselves with customer’s deposits, and avoiding wholesale funds. In the beginning, the main focus for Gilmore Bank is to strengthen the relationship between them and their loyal customers because that’s what kept them standing strong up to this day. Today, the saga of Gilmore Bank is still alive, and their goals are remain the same and that is “we strive to have a relationship and not just transactions with our customers.”
2. Overview of Operation
According to the peer group comparison obtained from the Uniform Bank Performance Report, Gilmore Bank currently has total assets of 180 Million which is a good amount, and some of can be converted to cash when needed. Now for the rest other ratios that were obtained from Gilmore Bank report, the report shows specific ratios which are found on both the balance sheet and income statement.
Balance Sheet The major differences between Gilmore Bank and its peer group are big for different reasons. For Assets, the main focus was in loans that are held without being sold till its maturity which are recognized in the balance sheet as loans not held for sale. Gilmore Bank has more loans not held for sale than its peer group, with about 64.72% more than its peer group which is at 63.09%, and this means that Gilmore Bank is a bit laid-back than its peer group when it comes to lending out loans. Next is Money Market Deposits Accounts (MMDA), Gilmore Bank is at 15% and that is less than its peer group which is at 17.95%, and this might be one of the reasons why some customers might not chose Gilmore Bank because some of the banks provide/offer their customers with higher yield. Another reasons such as the size of the bank compared to its peer is very important because customers like low rate and new features that big bank provide. Gilmore Bank has 0% Federal Funds Purchase & Repurchase agreement while its peer has about 0.22%. The main theory behind the Repurchase agreements is that it involves repurchasing the securities it had previously sold. Banks usually act as a lender purchase a corporation’s holdings of Treasury securities and then would sell them back to the corporation at a later date. This will allow the bank to not be in need of funds for couple days. For Total Equity Capital, Gilmore Bank has a total equity of 2.42% which less that its peer group that is at 6.20%. This indicates that Gilmore Bank is not as good its peer group when it comes covering up the losses
