Philadelphia University

MBA Program
Course MB-78
Winter/Spring 2003-Thursday evenings @ 6:30 p.m.
Commercial Banking
Professor : Lee E. Tabas
Mailing Address : 1 Dove Lane, Haverford, Pennsylvania 19041
Telephone: 610 896 6893 Evening 610 896 8079
Fax: 610 896 7152
E Mail : Lee@Tabasfunding.com
Office Hours by appointment

Banking is reminiscent of the Frank Sinatra song: "That's Life...You're riding high in April and shot down in May..but this big old world keeps spinning around...".  While the merger of Citibank and the Travelers Group forming Citigroup has been wildly successful, around 1990, banks were falling like flies.  Banking is a reflection of the economy with its' excesses and ups and downs.  This course provides an overview of banking history, progressing to banking of today including current strategies.   Banking is the management and evaluation of risk, and balancing the need for profitability with safety, soundness, convenience and benefit to the community. We will discuss the thought processes that go into making loan and asset/ liability  decisions. We will survey the changes in technology and systems that have occurred which provide for different delivery channels for banking services. We will discuss competition ,and the mixing together of banking , insurance ,investment banking, and other businesses. The course draws on the Professors’ 28 years of banking experience, including being President of Royal Bank of Pennsylvania. Focus of the course will be on concepts and understanding ,as opposed to formulas and calculation. Projects and case studies will be included to gain a better working knowledge of the matters at hand.

January: 16,23,30,February: 6,13,20,27, March 6,20,27, April:3,10,24, May 8(final)

Attendance is important. You are responsible for what is covered in class and if absent, you are responsible for finding out what was discussed. Not all of the material covered in class will be in the textbook. If you need to miss class, please let me know in advance.

Reasonable changes in class schedule, subjects covered, and grade weighting may be made without notice.  Assignments submitted late will generally receive a reduced grade. Any graded materials not returned to students will be held for 4 weeks after the end of class, and then discarded.

Academic Honesty: Although certainly not anticipated at this level of study. The student should be aware that the first cheating offense could result in the application of College disciplinary procedures according to the Academic Honesty Guidelines.

Quality of Submissions: The Philadelphia University MBA program is designed to complement accepted business practices .  Compositions or written problems should be typed in double-spaced business format in easy to read type.  Computations or problems may be typed or neatly handwritten.

While in class, personal electronic devices may be distracting to others, and should be turned off or on silent ring.

We will follow current industry events. Each student is required to bring in one article of interest regarding banking, finance, non-bank competition or a related topic during the course, make sufficient copies for the class, and lead a discussion on the topic.

The instructor plans to invite a guest speaker to be announced for  class 5,6,or 7

Class 1 (January 16) The origins of Banking. What do banks do? Visit a bank homework assignment due in 2 weeks (chapter 1)

The Regulatory Environment-classes 2,3

Class 2 (January 23) Historical events- the Bank Holiday of 1929, The Federal Reserve System, The Federal Deposit Insurance Corporation (chapter 2)

Class 3 (January 30) Contemporary events-Deregulation, The Thrift Crisis and Resolution Trust Corporation. The Community Reinvestment Act, Financial Services Modernization ,Non-bank Competition, Money Laundering

Class 4 (February 6)Funding Sources and the Payments system (Chapter 12,13)

Class 5 (February 13) Bank Investment Management (chapter 10)

Class 6 (February 20)Asset/Liability Management (chapter 5)

Quiz given in 6^th class on subject matter in first 5 classes.

           Lending-Classes 7-10

Class 7 (February 27)Commercial Loans:  Demand Loans, Term Loans, Lines of Credit, Asset Based Loans, SBA Loans and other government loan programs , (chapter 7)

Class 8 (March 6)Credit Evaluation and Financial Analysis-traditional and expert systems; Bunyan Case, Joyner Lumber Company Case or Ajax Manufacturing case due/to be discussed this class (chapter 7A)

Class 9 (March 20) Commercial Loan Structuring , Fisher Aircraft Case Due, Dealing with problem loans ; video

Class 10 (March 27) Consumer Loans-residential mortgages, home equity loans, credit cards , predatory lending, Mastercard, Visa and the Music Man assignment due this class (chapter8)

Quiz given in class 10 on Asset/Liability Management and Commercial Lending ,Responding to Regulators Case Study Distributed

Class 11 ( April 3) Evaluating Bank Performance- Profitability, risk management, Bank Mergers and Acquisitions, Capital management. (chapters 3,4,11)

Bank Management-Classes 12,13

Class 12 (April 10)Providing leadership and supervision of a banking institution including retail branch management case study distributed, due in class 13 (chapters 15,16)

Class 13 (April 24)Review, The Future of Banking, Teams to work on responding to regulators Case Study 

Class 14 (May 8) Final Exam, Responding to Regulators case study due .

Suggested Readings: