The Corporate Funds Management Division, First of American Bank Corporation: Bank Profitability and the national Economy
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Authors
Oviatt, Gregory D.
Issue Date
1993
Type
Thesis
Language
en_US
Keywords
Alternative Title
Abstract
The paper discusses my internship experience in the Funds Management Division of First of America Bank Corporation during the fall quarter of 1993. The paper is divided
into five primary sections: 1.) A history of First of America Bank Corporation, 2.) An examination of Gross Domestic Product and Unemployment as they relate to FOABC's financial performance and profitability, 3.) An examination of the effects of inflation
using the Consumer Price Index and the Producer Price Index as they relate to FOABC's financial performance and profitability, 4.) An examination of the effects of money supply changes and selected interest rates on FOABC's financial performance and profitability,
5.) A description of the author's work experience, and 6.) The author's future plans and goals, and how they relate to his academic experience at Kalamazoo College, as well as his internship at First of America.
The purpose of my internship was three-fold. First, I was to organize and document the numerous economic publications and resources the bank had on file. Second, I was to design, collect data for, document, and create two databases; one with the economic
information used by the department for their monthly and quarterly economic newsletters, and the other with historical (1972 - 1992) data on the corporation's financial performance, specifically, earnings, loan, deposit, and dividend growth. Finally, from these databases I was to perform correlation analysis using Lotus 123 to
determine which, if any, of the selected economic indicators influenced or displayed trends in First of America's financial
performance.
This project is designed to give the bank an idea of what to
expect given various economic environments, both regionally and
nationally. Although First of America operates banks in Michigan,
Indiana, and Illinois, we chose to concentrate our analysis on the
national economy and that of Michigan. First of America has not
been in Illinois and Indiana for a long enough period of time to
generate significant data for a statistical examination. The
project being undertaken is one of an exploratory nature, that is,
the director of our division and myself are not necessarily
expecting black and white results. Rather, what we are looking for
is an indication of what economic factors may be more relevant than
others to focus on for the bank's future planning and strategies.
Also, due to the large number of acquisitions that have occurred
over the past 8 years for First of America, there is likely to be
a great deal of volatility in the bank's balance sheet and income
statement; and consequently, we have used their variables excluding
acquisitions where possible. The results of this analysis will be
presented in two ways, graphically and statistically, using simple
regression to determine the statistical correlation that exists
between First of America's numbers and the economic variables. It
was decided that although there is not a great deal of statistical
significance to many of the regressions that were done, there is
still significant correlation between the variables which is why we
chose to show them graphically in addition to statistically. With
the large amount of acquisitions that have taken place, many of the
numbers have been skewed, thus adding a great deal of statistical
"noise" to the analysis that graphs tend not to recognize.
Description
iii, 70 p.
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