NOTE: This post is just an exercise that I’m doing for my own entertainment purposes.
In one of my business classes I was required to do industry analysis. I found the exercise to be a pain in the ass because I don’t think an analysis can be done in less than one week while I have other competing priorities. But I guess it was an interesting thing to get introduced to. Well, the FDIC allows one to perform industry analysis on banks. I recently switched from my credit union to ING’s online checking account because of Regulation D among other reasons. I have a post sitting in draft that has me complaining about the regulation and my credit union, but the post isn’t quite readable yet. Anyway, I did a search on the summary of deposits for the Philadelphia region and ING came out on top which the most deposits and thus the larger market share at 20.76%. I found that somewhat surprising because every company I’ve worked with has had its deposits in Wachovia (market share of 9.4% in Philadelphia area) or PNC(3.66%), and I’ve job hopped many times in the last few years. My experience means nothing, but I was surprised. ING was listed as having only 1 office compared with Wachovia’s 207 and PNC’s 152 and I know ING has these cafes (internet and coffee access) , one of which is in center city, Philadelphia. This data was for the period ending June 2007, so with the recent problems in the financial markets, the numbers may have changed.
The industry analysis can be done based on a peer group criteria and ING seems to stand out in some matters. They have way more securities than their peer group (63.34%:14.99%), comparable but slightly more residential loans than their peers 32.85% to 21.88% and I suppose this is their accounts receivable, which is why its in their asset section. They have more deposits than their peers at 75.71% to 64.53% and I suppose the deposits are a liability because they are due back to their customers. But is the 75.71% 100% of their deposits? I thought there were controls in place to prevent the old run-on-the-bank disaster. And ING has 75.71% of the deposits in interest bearing accounts and none in noninterest bearing accounts where the peer group has 43.88% in interest bearing and 9.13% in non interest bearing accounts.
I looked at the NCUA site to see if I could do a similar analysis on credit unions and found that I could. I can do a ratio analysis and compare with peer groups and what not. But I don’t know what to do with this information. My credit union has more charge-offs than its peers so that could mean even less attractive interest rates than they have now. I can see the the membership growth is declining and that my credit union has more delinquent loans than its peers…
Obviously I’d like my money to be safe in whatever depository institution I stick it in. And I suppose having these numbers will help potential investors evaluate the institution better and keep them in the good books of their oversight organizations (FDIC/NCUA). And its nice to have these numbers for me to look at…for entertainment purposes.
