目录
 1 FUNDAMENTAL FORCES OF CHANGE IN BANKING
  The Fundamental Forces of Change
   Increased Competition
   Competition for Deposits
   Competition for Loans
   Competition for Payment Services
   Competition for Other Bank Services
   Deregulation and Reregulation
   Financial Innovation
   Globalization
  Capital Requirements
  Increased Consolidation
  Summary
 2 ANALYZING BANK PERFORMANCE
  Commercial Bank Financial Statements
   The Balance Sheet
   The Income Statement
  The Relationship between the Balance Sheet and
   Income Statement
  The Return on Equity Model
   The Uniform Bank Performance Report
   Profitability Analysis
   Expense Ratio and Asset Utilization
  Banking Risks and Returns: The Profitability, Liquidity, and
   Solvency Trade-Off
   Credit Risk
   Liquidity Risk
   Market Risk
   Operating Risk
   Legal Reputation Risk
   Capital or Solvency Risk
  Maximizing the Market Value of Bank Equity
  Evaluating Bank Performance: An Application
   PNC's Profitability and Risk versus Peers in 2001
   PNC's Profitability versus Risk: 1993-2001
  CAMELS Ratings
  Performance Characteristics of Different-sized Banks
  Financial Statement Manipulation
   Preferred Stock
   Nonperforming Loans
   Securities Gains and Losses
   Nonrecurring Sales of Assets
  Summary
 3 MANAGING NONINTEREST INCOME AND NONINTEREST EXPENSE
  Common Financial Ratios of Expense Control and
   Noninterest Income Growth
   Noninterest Income
   Noninterest Expense
   Key Ratios
   Operating Risk Ratio
  Customer Profitability and Business Mix
   Which Customers Are Profitable?
   What Is the Appropriate Business Mix?
  Strategies to Manage Noninterest Expense
   Cost Management Strategies
  Summary
 4 MANAGING INTEREST RATE RISK: GAP AND EARNINGS SENSITIVITY
  Measuring Interest Rate Risk with GAP
  Traditional Static GAP Analysis
   What Determines Rate Sensitivity?
   Factors Affecting Net Interest Income
   Changes in the Level of Interest Rates
   Changes in the Relationship between Short-Term Asset Yields and Liability Costs
   Changes in Volume
   Changes in Portfolio Composition
   Rate, Volume, and Mix Analysis
   Rate-Sensitivity Reports
   Strengths and Weaknesses: Static GAP Analysis
   Link between GAP and Net Interest Margin
  Earnings Sensitivity Analysis
   Exercise of Embedded Options in Assets and Liabilities
   Different Interest Rates Change by Different Amounts at Different Times
   Earnings Sensitivity Analysis: An Example
  Income Statement GAP
  Managing the GAP and Earnings Sensitivity Risk
  Summary
 5 MANAGING INTEREST RATE RISK: DURATION GAP AND MARKET VALUE OF EQUITY
  Measuring Interest Rate Risk with Duration GAP
   Duration, Modified Duration, and Effective Duration
   Duration GAP Model
   A Duration Application for Banks
   An Immunized Portfolio
  Market Value of Equity Sensitivity Analysis
   MVE Sensitivity Analysis: An Example
  Earnings Sensitivity Analysis versus MVE Sensitivity Analysis:
   Which Model Is Better?
   Strengths and Weaknesses: GAP and Earnings Sensitivity Analysis
  Summary
 6 MANAGING LIABILITIES
  The Composition of Bank Liabilities
   Recent Trends for Large and Small Banks
  Characteristics of Small Denomination Liabilities
  Transactions Accounts
   Electronic Money
   Service Charges
  Characteristics of Large Denomination Liabilities
   Jumbo CDs (CDs over 100,000)
   Immediately Available Funds
   Federal Funds Purchased
   Security Repurchase Agreements
   Foreign Office Deposits
   Individual Retirement Accounts
   Federal Home Loan Bank Advances
  Funding Costs and Banking Risk
   Funding Sources and Interest Rate Risk
   Funding Sources and Liquidity Risk
   Funding Sources and Credit Risk
   Funding Sources and Bank Safety
  Borrowing from the Federal Reserve
  Federal Deposit Insurance
   Depositor Protection and Handling Problem Institutions
  Summary
 7 THE EFFECTIVE USE OF CAPITAL
  Why Worry about Bank Capital?
  Risk-Based Capital Standards
   The Basel Agreement
   Risk-Based Elements of the Plan
  What Constitutes Bank Capital?
  Fdiciaand Bank Capital Standards
   Tier 3 Capital Requirements for Market Risk
   Capital Requirements for Market Risk Using Internal Models
   The New Basel Capital Accord (Basel II) and Operational Risk
  What Is the Function of Bank Capital?
  How Much Capital Is Adequate?
   Weaknesses of the Risk-Based Capital Standards
  The Effect of Capital Requirements on Bank Operating Policies
   Limiting Asset Growth
   Changing the Capital Mix
   Changing Asset Composition
   Pricing Policies
   Shrinking the Bank
  Characteristics of External Capital Sources
   Subordinated Debt
   Common Stock
   Preferred Stock
   Trust Preferred Stock
   Leasing Arrangements
  Capital Planning
   Applications
  Summary
 8 LIQUIDITY PLANNING AND MANAGING CASH ASSETS
  The Relationship between Cash and Liquidity Requirements
   Cash versus Liquid Assets
  Objectives of Cash Management
  Reserve Balances at the Federal Reserve Bank
   Liquidity Planning over the Reserve Maintenance Period
  Managing Float
   The Payment System
   Holds on Deposited Checks
   Daylight Overdrafts
   Pricing Federal Reserve Check-Clearing Services
  Managing Correspondent Balances
   Correspondent Banking Services
   Payment for Services
   Computing Balance Requirements
  Liquidity Planning
   The Development of Liquidity Strategies
   Liquidity versus Profitability
   Liquidity, Credit, and Interest Rate Risk
  Traditional Measures of Liquidity
   Asset Liquidity Measures
   Liability Liquidity Measures
   Liquidity Analysis of PNC Bank and Community National Bank
   Liquidity Planning: Monthly Intervals
   Considerations in Selecting Liquidity Sources
  Summary
 9 OVERVIEW OF CREDIT POLICY AND LOAN CHARACTERISTICS
  Recent Trends in Loan Growth and Quality
  Trends in Competition for Loan Business
  The Credit Process
   Business Development and Credit Analysis
   Credit Execution and Administration
   Credit Review
  Characteristics of Different Types of Loans
   Real Estate Loans
   Commercial Loans
   Agriculture Loans
   Consumer Loans
  Summary
 10 EVALUATING COMMERCIAL LOAN REQUESTS
  Fundamental Credit Issues
   Character of the Borrower and Quality of Data Provided
   Use of Loan Proceeds
   Loan Amount
   The Primary Source and Timing of Repayment
   Collateral
  Evaluating Credit Request: A Four-Part Process
   Overview of Management, Operations, and the Firm's Industry
   Common Size and Financial Ratio Analysis
   Cash Flow Analysis
   Application to Prism Industries
   Financial Projections
   Risk-Classification Scheme
  Credit Analysis: An Application
   Common Size and Financial Ratios Analysis: Wade's Office Furniture
   Cash-Based Income Statement: Wade's Office Furniture
   Sensitivity Analysis
   Summary
 11 EVALUATING CONSUMER LOANS
  Types of Consumer Loans
   Installment Loans
   Noninstallment Loans
  Subprime Loans
  Credit Analysis
   Policy Guidelines
   Acceptable Loans
   Evaluation Procedures: Judgmental and Credit Scoring
   An Application: Credit Scoring a Consumer Loan
   An Application: Indirect Lending
  Recent Risk and Return Characteristics of Consumer Loans
   Revenues from Consumer Loans
   Consumer Loan Losses
   Interest Rate and Liquidity Risk with Consumer Credit
  Summary
 12 CUSTOMER PROFITABILITY ANALYSIS AND LONG PRICING
  Account Analysis Framework
   Expense Components
   Target Profit
   Revenue Components
  Customer Profitability Analysis: An Application to
   Commercial Accounts
  Pricing New Commercial Loans
   Risk-Adjusted Returns on Loans
   Fixed Rates versus Floating Rates
   Base Rate Alternatives
  Customer Profitability Analysis: Consumer Installment Loans
  Summary
 13 THE INVESTMENT PORTFOLIO AND POLICY GUIDELINES
  Dealer Operations and the Securities Trading Account
  Objectives of the Investment Portfolio
   Accounting for Investment Securities
   Safety or Preservation of Capital
   Liquidity
   Yield
   Diversify Credit Risk
   Help Manage Interest Rate Risk Exposure
   Pledging Requirements
   Trade-Offs between Objectives
  Composition of the Investment Portfolio
  The Risk Return Characteristics of Investment Securities
   General Return Characteristics
   General Risk Characteristics
   Regulatory Guidelines
  Establishing Investment Policy Guidelines
   Return Objectives
   Portfolio Composition
   Liquidity Considerations
   Credit Risk Considerations
   Interest Rate Risk Considerations
   Total Return versus Current Income
  General Portfolio Considerations
   Optimum Size of the Loan Portfolio
   Stability of Deposits
   Optimal Federal Funds Position
   Capital Requirements
  Summary
 1 FUNDAMENTAL FORCES OF CHANGE IN BANKING
  The Fundamental Forces of Change
   Increased Competition
   Competition for Deposits
   Competition for Loans
   Competition for Payment Services
   Competition for Other Bank Services
   Deregulation and Reregulation
   Financial Innovation
   Globalization
  Capital Requirements
  Increased Consolidation
  Summary
 2 ANALYZING BANK PERFORMANCE
  Commercial Bank Financial Statements
   The Balance Sheet
   The Income Statement
  The Relationship between the Balance Sheet and
   Income Statement
  The Return on Equity Model
   The Uniform Bank Performance Report
   Profitability Analysis
   Expense Ratio and Asset Utilization
  Banking Risks and Returns: The Profitability, Liquidity, and
   Solvency Trade-Off
   Credit Risk
   Liquidity Risk
   Market Risk
   Operating Risk
   Legal Reputation Risk
   Capital or Solvency Risk
  Maximizing the Market Value of Bank Equity
  Evaluating Bank Performance: An Application
   PNC's Profitability and Risk versus Peers in 2001
   PNC's Profitability versus Risk: 1993-2001
  CAMELS Ratings
  Performance Characteristics of Different-sized Banks
  Financial Statement Manipulation
   Preferred Stock
   Nonperforming Loans
   Securities Gains and Losses
   Nonrecurring Sales of Assets
  Summary
 3 MANAGING NONINTEREST INCOME AND NONINTEREST EXPENSE
  Common Financial Ratios of Expense Control and
   Noninterest Income Growth
   Noninterest Income
   Noninterest Expense
   Key Ratios
   Operating Risk Ratio
  Customer Profitability and Business Mix
   Which Customers Are Profitable?
   What Is the Appropriate Business Mix?
  Strategies to Manage Noninterest Expense
   Cost Management Strategies
  Summary
 4 MANAGING INTEREST RATE RISK: GAP AND EARNINGS SENSITIVITY
  Measuring Interest Rate Risk with GAP
  Traditional Static GAP Analysis
   What Determines Rate Sensitivity?
   Factors Affecting Net Interest Income
   Changes in the Level of Interest Rates
   Changes in the Relationship between Short-Term Asset Yields and Liability Costs
   Changes in Volume
   Changes in Portfolio Composition
   Rate, Volume, and Mix Analysis
   Rate-Sensitivity Reports
   Strengths and Weaknesses: Static GAP Analysis
   Link between GAP and Net Interest Margin
  Earnings Sensitivity Analysis
   Exercise of Embedded Options in Assets and Liabilities
   Different Interest Rates Change by Different Amounts at Different Times
   Earnings Sensitivity Analysis: An Example
  Income Statement GAP
  Managing the GAP and Earnings Sensitivity Risk
  Summary
 5 MANAGING INTEREST RATE RISK: DURATION GAP AND MARKET VALUE OF EQUITY
  Measuring Interest Rate Risk with Duration GAP
   Duration, Modified Duration, and Effective Duration
   Duration GAP Model
   A Duration Application for Banks
   An Immunized Portfolio
  Market Value of Equity Sensitivity Analysis
   MVE Sensitivity Analysis: An Example
  Earnings Sensitivity Analysis versus MVE Sensitivity Analysis:
   Which Model Is Better?
   Strengths and Weaknesses: GAP and Earnings Sensitivity Analysis
  Summary
 6 MANAGING LIABILITIES
  The Composition of Bank Liabilities
   Recent Trends for Large and Small Banks
  Characteristics of Small Denomination Liabilities
  Transactions Accounts
   Electronic Money
   Service Charges
  Characteristics of Large Denomination Liabilities
   Jumbo CDs (CDs over 100,000)
   Immediately Available Funds
   Federal Funds Purchased
   Security Repurchase Agreements
   Foreign Office Deposits
   Individual Retirement Accounts
   Federal Home Loan Bank Advances
  Funding Costs and Banking Risk
   Funding Sources and Interest Rate Risk
   Funding Sources and Liquidity Risk
   Funding Sources and Credit Risk
   Funding Sources and Bank Safety
  Borrowing from the Federal Reserve
  Federal Deposit Insurance
   Depositor Protection and Handling Problem Institutions
  Summary
 7 THE EFFECTIVE USE OF CAPITAL
  Why Worry about Bank Capital?
  Risk-Based Capital Standards
   The Basel Agreement
   Risk-Based Elements of the Plan
  What Constitutes Bank Capital?
  Fdiciaand Bank Capital Standards
   Tier 3 Capital Requirements for Market Risk
   Capital Requirements for Market Risk Using Internal Models
   The New Basel Capital Accord (Basel II) and Operational Risk
  What Is the Function of Bank Capital?
  How Much Capital Is Adequate?
   Weaknesses of the Risk-Based Capital Standards
  The Effect of Capital Requirements on Bank Operating Policies
   Limiting Asset Growth
   Changing the Capital Mix
   Changing Asset Composition
   Pricing Policies
   Shrinking the Bank
  Characteristics of External Capital Sources
   Subordinated Debt
   Common Stock
   Preferred Stock
   Trust Preferred Stock
   Leasing Arrangements
  Capital Planning
   Applications
  Summary
 8 LIQUIDITY PLANNING AND MANAGING CASH ASSETS
  The Relationship between Cash and Liquidity Requirements
   Cash versus Liquid Assets
  Objectives of Cash Management
  Reserve Balances at the Federal Reserve Bank
   Liquidity Planning over the Reserve Maintenance Period
  Managing Float
   The Payment System
   Holds on Deposited Checks
   Daylight Overdrafts
   Pricing Federal Reserve Check-Clearing Services
  Managing Correspondent Balances
   Correspondent Banking Services
   Payment for Services
   Computing Balance Requirements
  Liquidity Planning
   The Development of Liquidity Strategies
   Liquidity versus Profitability
   Liquidity, Credit, and Interest Rate Risk
  Traditional Measures of Liquidity
   Asset Liquidity Measures
   Liability Liquidity Measures
   Liquidity Analysis of PNC Bank and Community National Bank
   Liquidity Planning: Monthly Intervals
   Considerations in Selecting Liquidity Sources
  Summary
 9 OVERVIEW OF CREDIT POLICY AND LOAN CHARACTERISTICS
  Recent Trends in Loan Growth and Quality
  Trends in Competition for Loan Business
  The Credit Process
   Business Development and Credit Analysis
   Credit Execution and Administration
   Credit Review
  Characteristics of Different Types of Loans
   Real Estate Loans
   Commercial Loans
   Agriculture Loans
   Consumer Loans
  Summary
 10 EVALUATING COMMERCIAL LOAN REQUESTS
  Fundamental Credit Issues
   Character of the Borrower and Quality of Data Provided
   Use of Loan Proceeds
   Loan Amount
   The Primary Source and Timing of Repayment
   Collateral
  Evaluating Credit Request: A Four-Part Process
   Overview of Management, Operations, and the Firm's Industry
   Common Size and Financial Ratio Analysis
   Cash Flow Analysis
   Application to Prism Industries
   Financial Projections
   Risk-Classification Scheme
  Credit Analysis: An Application
   Common Size and Financial Ratios Analysis: Wade's Office Furniture
   Cash-Based Income Statement: Wade's Office Furniture
   Sensitivity Analysis
   Summary
 11 EVALUATING CONSUMER LOANS
  Types of Consumer Loans
   Installment Loans
   Noninstallment Loans
  Subprime Loans
  Credit Analysis
   Policy Guidelines
   Acceptable Loans
   Evaluation Procedures: Judgmental and Credit Scoring
   An Application: Credit Scoring a Consumer Loan
   An Application: Indirect Lending
  Recent Risk and Return Characteristics of Consumer Loans
   Revenues from Consumer Loans
   Consumer Loan Losses
   Interest Rate and Liquidity Risk with Consumer Credit
  Summary
 12 CUSTOMER PROFITABILITY ANALYSIS AND LONG PRICING
  Account Analysis Framework
   Expense Components
   Target Profit
   Revenue Components
  Customer Profitability Analysis: An Application to
   Commercial Accounts
  Pricing New Commercial Loans
   Risk-Adjusted Returns on Loans
   Fixed Rates versus Floating Rates
   Base Rate Alternatives
  Customer Profitability Analysis: Consumer Installment Loans
  Summary
 13 THE INVESTMENT PORTFOLIO AND POLICY GUIDELINES
  Dealer Operations and the Securities Trading Account
  Objectives of the Investment Portfolio
   Accounting for Investment Securities
   Safety or Preservation of Capital
   Liquidity
   Yield
   Diversify Credit Risk
   Help Manage Interest Rate Risk Exposure
   Pledging Requirements
   Trade-Offs between Objectives
  Composition of the Investment Portfolio
  The Risk Return Characteristics of Investment Securities
   General Return Characteristics
   General Risk Characteristics
   Regulatory Guidelines
  Establishing Investment Policy Guidelines
   Return Objectives
   Portfolio Composition
   Liquidity Considerations
   Credit Risk Considerations
   Interest Rate Risk Considerations
   Total Return versus Current Income
  General Portfolio Considerations
   Optimum Size of the Loan Portfolio
   Stability of Deposits
   Optimal Federal Funds Position
   Capital Requirements
  Summary