Features

Initial bank financial position is given and each of three banks shares equally in a county’s market share.

Bank Assets Bank Liabilities
Cash and due from
Securities
Fed Funds sold
Loans
  • Ag production
  • Ag real estate
  • Real estate
  • Commercial
  • Consumer

Bank premises and equipment

 Deposits
  • DDA
  • NOW
  • MMDA
  • Savings
  • CD

Fed Funds purchased

Stockholders equity capital
Capital and surplus
Retained earnings

Future income and market share is determined by the economic environment (per capita income, retail sales, etc.), the decisions your competitors make, and the decisions you make:

Management options: Sources of funds Use of funds

Interest rates on loans

  • Ag Production
  • Ag Real Estate
  • Real Estate
  • Commercial
  • Consumer

Interest rates on deposits
Number of loan officers
Salaries for other employees
Advertising expense
Volumes of new loans and investments
Service Charge

 Maturing assets
  • Loans
    • Ag production
    • Ag real estate
    • Real estate
    • Commercial
    • Consumer
  • Investments
    • 6-mo. gov.
    • 1-year gov.
    • 3-year gov.
    • 2-year muni.
    • 5-year muni.

Cash and Due from (receivables)
Change in deposits
Sale of investments
Fed funds purchased (borrowed)

 Cash and reserve requirements
Loans
  • Ag production
  • Ag real estate
  • Real estate
  • Commercial
  • Consumer

Investments

  • 6-mo. gov.
  • 1-year gov.
  • 3-year gov.
  • 2-year muni.
  • 5-year muni.

Fed Funds sold (loaned)
Contraints on decisions
  • Cash in excess of reserve requirements results in sale of Fed Funds up to 100% of equity capital. Beyond that, excess cash earns no interest.
  • Insufficient cash to meet operating cash and Federal Reserve requirements on deposits, results in Fed Funds purchases as needed up to the level of total investment securities. Beyond that, the rate for additional Fed Funds is 1.5X the current rate. Fed funds purchased must be repaid the next period.
  • If the capital-to-asset ratio falls below 5 percent, new loans may be restricted until the capital-to-asset ratio returns to 5 percent.
  • Reserve requirements equal 3% of the first $42.2 million of transaction deposits (DDA, NOW, MMDA) and 10% of transaction deposits over $42.2 million.
Other notes
  • While relative risk varies by type of loan, loan charge-offs are random within a given period.
  • Actual interest rates may differ each period of play.
  • There is no guarantee that a bank will make as many new loans as desired.
Awards

A bank can earn one or more of the following awards

  • Outstanding Bank
  • Most Profitable
  • Farmer's Friend
  • Most Improved
  • Good Neighbor
  • Coupon Clippers
  • Loan Loss Blues