Based on these exhibits, please make an Excel template for analysis of the Redhook Ale Brewery loan application. Specifically, what do you think of David Mickelson's projections? Hint: consider the forecasts, collateral, strategy, and past performance. In other words, how can I analyze these financial statements to determine if the company should get a loan? What should I consider? 

 

As Harding, would you make this loan? If yes, when would you set the loan's maturity date? What covenants would you request? What (if any) covenants would you demand? What yield would you demand? 

       

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292-057 Exhibit 1 Portfolio Composition as a Percentage of Average Consolidated Assets, All Insured Commercial Banks, 1985-1989 Interest-earning assets Loans Commercial and industrial Real estate Construction Farmland One-to four-family residential Multifamily residential Nonfarm nonresidential Consumer Credit card Installment and other Foreign government Agricultural production Security Other Securities U.S. government State and local government Other bonds and stocks Trading account assets Gross federal funds sold and reverse repurchase agreements Interest-bearing deposits Deposit liabilities In foreign offices In domestic offices Demand deposits Other checkable deposits MMDAS Other savings Small time deposits Large time deposits Gross federal funds purchased and repurchase agreements Other liabilities for borrowed money Other borrowings Memo Money market liabilities Loss reserves Total equity capital Source: Federal Reserve Bulletin, July 1991 1985 86.05% 58.51 22.26 15.71 3.20 .41 7.20 .44 4.00 10.80 2.48 8.32 1.56 1.51 .83 7.19 17.58 9.50 6.99 1.08 1.24 4.43 5.53 77.30 12.61 64.69 15.63 4.57 11.72 4.64 16.67 11.46 7.68 3.44 5.70 35.19 .80 6.17 1986 86.02% 57.86 20.96 16.71 3.49 .43 7.31 .49 4.43 11.06 2.75 8.31 1.43 1.22 .79 7.27 18.29 9.26 7.49 1.55 1.55 4.72 5.15 76.72 11.61 65.11 16.03 5.21 12.64 4.79 15.68 10.76 8.25 4.02 5.17 34.63 .92 6.21 1987 86.62% 58.36 20.04 18.69 3.87 .46 8.00 .56 5.21 11.10 2.97 8.13 1.34 1.03 .63 6.92 18.58 10.03 6.25 2.29 1.32 4.43 5.26 76.43 11.38 65.06 15.41 6.01 12.32 5.76 14.95 10.60 8.06 4.45 4.90 U.S. Bank of Washington 34.49 1.36 6.06 1988 87.94% 60.59 19.55 20.56 4.01 .49 9.03 .58 5.77 11.31 3.13 8.18 1.23 .99 .53 6.42 16.84 10.35 3.69 2.80 1.26 4.26 4.99 76.22 10.85 65.37 14.34 6.27 11.44 6.08 16.16 11.08 7.72 4.93 3.49 34.58 1.54 6.10 1989 87.84% 61.30 19.20 22.18 4.14 .51 9.94 .59 6.29 11.40 3.26 8.14 1.03 .96 .54 5.97 16.74 10.78 3.14 2.82 1.25 4.20 4.36 76.01 10.05 65.96 13.63 6.16 10.55 5.81 18.15 11.66 7.95 4.87 3.39 34.53 1.50 6.27 292-057 Exhibit 1 Portfolio Composition as a Percentage of Average Consolidated Assets, All Insured Commercial Banks, 1985-1989 Interest-earning assets Loans Commercial and industrial Real estate Construction Farmland One-to four-family residential Multifamily residential Nonfarm nonresidential Consumer Credit card Installment and other Foreign government Agricultural production Security Other Securities U.S. government State and local government Other bonds and stocks Trading account assets Gross federal funds sold and reverse repurchase agreements Interest-bearing deposits Deposit liabilities In foreign offices In domestic offices Demand deposits Other checkable deposits MMDAS Other savings Small time deposits Large time deposits Gross federal funds purchased and repurchase agreements Other liabilities for borrowed money Other borrowings Memo Money market liabilities Loss reserves Total equity capital Source: Federal Reserve Bulletin, July 1991 1985 86.05% 58.51 22.26 15.71 3.20 .41 7.20 .44 4.00 10.80 2.48 8.32 1.56 1.51 .83 7.19 17.58 9.50 6.99 1.08 1.24 4.43 5.53 77.30 12.61 64.69 15.63 4.57 11.72 4.64 16.67 11.46 7.68 3.44 5.70 35.19 .80 6.17 1986 86.02% 57.86 20.96 16.71 3.49 .43 7.31 .49 4.43 11.06 2.75 8.31 1.43 1.22 .79 7.27 18.29 9.26 7.49 1.55 1.55 4.72 5.15 76.72 11.61 65.11 16.03 5.21 12.64 4.79 15.68 10.76 8.25 4.02 5.17 34.63 .92 6.21 1987 86.62% 58.36 20.04 18.69 3.87 .46 8.00 .56 5.21 11.10 2.97 8.13 1.34 1.03 .63 6.92 18.58 10.03 6.25 2.29 1.32 4.43 5.26 76.43 11.38 65.06 15.41 6.01 12.32 5.76 14.95 10.60 8.06 4.45 4.90 U.S. Bank of Washington 34.49 1.36 6.06 1988 87.94% 60.59 19.55 20.56 4.01 .49 9.03 .58 5.77 11.31 3.13 8.18 1.23 .99 .53 6.42 16.84 10.35 3.69 2.80 1.26 4.26 4.99 76.22 10.85 65.37 14.34 6.27 11.44 6.08 16.16 11.08 7.72 4.93 3.49 34.58 1.54 6.10 1989 87.84% 61.30 19.20 22.18 4.14 .51 9.94 .59 6.29 11.40 3.26 8.14 1.03 .96 .54 5.97 16.74 10.78 3.14 2.82 1.25 4.20 4.36 76.01 10.05 65.96 13.63 6.16 10.55 5.81 18.15 11.66 7.95 4.87 3.39 34.53 1.50 6.27