That being said, the bank currently has no long-term debt, which is obviously favorable because the longer you don’t pay the debt, the more interest builds on it. Owner’s equity on the balance sheet started at 49.458 at the end of the first quarter (3/31/19) and managed to stay pretty much the same as it ended at 47.594 during the last quarter (12/31/19). This is favorable because this means there have not been a lot of losses being made by stockholders. One unfavorable item on the balance sheet are the loans, being that they grew from 488.791 at the beginning of the year to 604.480 by the last quarter; this is unfavorable because as you take out more loans, you have to pay more money to pay them off with added interest. For the loan loss reserves, the average is -5.5, which is unfavorable because the number tells us that the bank is not paying their loans, which can lead to debt. When looking at the banks borrowed funds, in the first quarter the bank has no borrowed funds, but by the end of the second quarter there were borrowed funds of 7.494. This is unfavorable because borrowed funds tend to be very costly. Other liabilities grew throughout the year; on 3/31/19, other liabilities was at 24.426, but at the end on 12/31/19 it was at 28.973. This increase means …show more content…
You can see in the summary that the assets and liabilities and equity are about equal to each other at 757.4, which is good and very important because you always want your assets and liabilities to balance. These reports tell us two main things about the assets: the first is that loans are the main focus of the assets, and the second is that the assets seem to be mainly increasing. We can tell that loans are the main focus due to the fact that almost 90% of the total assets are loans, leaving only 10% to other assets. That being said, the increase in assets can potentially be unfavorable because with the increase in loans comes an increase in what you need to pay off. When looking at the liabilities and equity, we can see that the main items include checking and savings, and time accounts. The increase we see in checking and savings is a positive because this tells the bank that they made more money by the end of the year. These reports also tell us that the bank is not doing a lot of borrowing, which is good because the bank doesn’t want to owe a lot of money since they would then get charged with a lot of interest. When looking at the funds management, we can determine how much money is being provided and used. The most important items on this statement are loans and consumer deposits. The loans had a beginning balance of 564.9, but ended with 604.5 on 12/31/19; this is good as long as