Assignment #1

Part I.
Use the latest Federal Reserve Z.1 Release Level Tables to describe recent
changes in the composition of financial assets and liabilities of the
following intermediaries:
In the F.1 table showing the total credit market borrowing and lending in billions of
dollars from 2005 to 2014, it can be seen that credit unions and life insurers both
increased the about of credit they made available to their customers from 2005 to
2008. From 2007 to 2008, credit unions decreased the amount of credit they made
available and that continued to decrease until 2012. From 2007 to 2008, life
insurers dramatically increased the amount of credit they made available, which
could be related to more individuals getting life insurance.
In the L.1 table showing credit market debt outstanding, it can be seen that life
insurers had larger outstanding debts than credit unions starting from 2008
onwards.
L.116 Life Insurers
From 2005 to 2014, the total financial assets of life insurers increased. By 2014, the
largest asset classes were corporate & foreign bonds and credit market instruments.
The life insurers also saw their total liabilities increase as well between 2005 and
2014. Their largest liabilities were life insurance reserves and pension entitlements
by 2014. They also saw a general decrease in their amount of security repurchase
agreements across the years.
L.114 Credit Unions
From 2005 to 2014, the total financial assets of credit unions increased and this can
be attributed to the recession that hit in 2007-2008 as well as the slow recovery of
the economy. More likely people were distrustful of the larger banks and started to
put their money away into these smaller credit unions. By 2014, the largest asset
classes were home mortgages and credit market instruments. The credit unions also
saw their total liabilities increase as well between 2005 and 2014.Their interbank
liabilities increased across the years. By 2014, the largest liabilities were
shares/deposits and small time & savings accounts. By 2014, the amount of federal
fund and security repos were wiped out.

Part II.
Use the FDIC Institution Directory and Statistics on Depository
Institutions to pull up information on (1) the largest and (2) the smallest
FDIC insured institutions chartered (or headquartered) in the District of
Columbia based on asset size as of 3/31/2015.
The largest bank in the District of Columbia based on asset size is the Bank of
Georgetown, with total assets of $1,135,512 billion. The smallest bank in D.C. is City
First Bank of D.C., National Association with total assets of $235,686 billion. (See
attached asset and liabilities schedules for both.)
Then compare how each bank's asset portfolio allocations (%cash %
securities %residential loans %commercial loans etc...), net income, and
total equity capital has changed (or not changed) since 3/31/2009.
From 3/31/2009 to 3/31/2015, Bank of Georgetowns total assets overall have
increased as well as its liabilities. Cash as a percentage of total assets has remained
consistent and has only increased only slightly across the 6 years. Its securities as a
percentage of total assets have decreased. Bank of Georgetowns total equity
improved from 8.12% at 3/31/2009 to 10.43% at 3/31/2015. The bank makes loans
substantially for commercial real estate at 38.89% of total real estate loans made. It
has moved away from making individual loans as well as commercial and industrial
loans across the six years.

From 3/31/2009 to 3/31/2015, City First Bankss total assets overall have increased
as well as its liabilities, but not as significantly as Bank of Georgetown. Cash as a
percentage of total assets has remained consistent and has across the 6 years from
2.96% to 3.23%. Its securities as a percentage of total assets have increased, but
only slightly. City Firsts total equity declined very slightly from 14.41% at 3/31/2009
to 14.11% at 3/31/2015. The bank makes loans substantially for commercial real
estate at 21.65% of total real estate loans made. It has done away with making
loans to individuals and has significantly decreased the amount of commercial and
industrial loans it has made across the six years from 11.91% at 3/31/2009 to 3.66%
at 3/31/2015.

Which bank has the highest Total Equity Capital as a percent of Total
Assets?
City First Bank of D.C., National Association has the higher total equity capital as a
percent of total assets at 14.1%, while Bank of Georgetown has a total equity
capital of 10.43% as of 3/31/2015. For 3/31/2009, City First Bank still has a higher
total equity capital at 14.4%, while Bank of Georgetown had 8.1%. This shows that

as a smaller bank, City First Bank has more equity capital on hand than Bank of
Georgetown. It also shows that City First Bank would be better able to payoff of its
debts in the event of liquidation. A lower equity capital would signify liquidity risk,
which in turn means that the bank would be getting closer to failing.