First Mid west Bancorp, Inc. Term Paper - 550 Words

First Mid west Bancorp, Inc. (Term Paper Sample) Content: Name:Instructor:Institution:Date:First Mid west Bancorp, Inc.,One Pierce Place,Suite1500Itasca,IL 60143(630) 875-7450THE FIRST MIDWEST BANK COMPANY PROFILEThe First Midwest Bank Company is a holding company with its headquarters in Chicago in Illinois. It provides banking services at retail and commercial services. Their customers include commercial and industrial entities as well government and the general public. Their total assets are over $ 8 billion and have management of wealth asset of over$ 6.7 billion. It accepts deposits, issue loans, retirement package and investment packages. It has over a 100 branches. They serve all areas and customers from all industries.Calculate the Financial Institutionà ¢Ã¢â€š ¬s:YEAR 2013ROE and ROAReturn on equityROE=net income/shareholders equity=79,306/1,001,442=0.07919A profitability ratio on Midwest bank indicates how its uses contribution from shareholders to earn profits for the firm. From the above ratio Midwest bank earne d 0.079 fr0m every $1 invested by the shareholders.Return on assetsROA=NET INCOME/AVERAGE TOTAL ASSETS=79306/8176623=0.0096990.97%This ratio indicates the ability of Midwest bank in utilizing its assets in contributing to the firmà ¢Ã¢â€š ¬s profitability. This means the firm assets only returns 0.97% of the firms net income hence they are not being used optimally.Equity Multiplier=TOTAL ASSETS/TOTAL STOCKHOLDERS EQUITY=$ 8,253,407/1,001,442=8.24This is a liquidity ratio and indicates amounts Midwest bank assets that are financed by the shareholders equity. In 2013 the bank had a higher ratio of the equity multiplier meaning that more assets were debt financed hence higher risks to its creditors.Profit MarginProfit Margin= (net income/total operating income),=79306/128,021=0.6262%This ratio is used by mid west bank to determine how the firms earns profit at each level of sales it makes. The firm converted 62% of its sales in 2013 into profit and therefore this is an indicator of pr ofitability by the firm.Other ratiosInterest income/total operating income,=239,224/128,021=1.87Provision for loan loss/total operating income,= 16,257/128,021=0.13Non-interest expense/total operating income=256,737/128,021=2.01Income taxes/total operating income (for banks)=48,715/128,021=0.38Asset Utilization (total operating income/total assets),=128,021/8,253,407=0.0155Interest income/total assets=239,224/8,253,407=0.94Non-interest income/total assets (for banks).=140,883/8,253,407=0.017YEAR 2012ROE and ROAROE=net income/shareholders equity= (21,054)/ 940,893=-0.0053ROA=NET INCOME/AVERAGE TOTAL ASSETS= (21,054) / 8036716.5= -0.0026=O.26%Equity Multiplier=TOTAL ASSETS/TOTAL STOCKHOLDERS EQUITY=$ 8,099,839/940,893=8.61Profit Margin (net income/total operating income),= (21,054)/ (49,936)=0.42Interest income/total operating income,=248,752/ (49,936)= -4.98Provision for loan loss/total operating income,= 158,052/ (49,936)= -3.17Non-interest expense/total operating income=267,500/ (4 9,936)=-5.36Income taxes/total operating income (for banks)= (28,882)/ (49,936)=0.58Asset Utilization (total operating income/total assets),= (49,936)/ 8,099,839=0.0062Interest income/total assets=248,752/8,099,839=0.03Non-interest income / total assets (for banks).=109,948/8,099,839=0.014The Comparison of financial ratios for analysis in 2013 and 2012.