Deering Woods Condominium Association

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Background: Chong wants you to continue to focus on the Hastings case and to complete preliminary work prior to writing a Synthesis Memo for the case (the Synthesis Memo will be completed in Project 1, week 3).

Chong asks you to analyze the four sections that comprise a Synthesis Memo and plan what you will include in the Memo. You will submit your analysis and summary to her for discussion prior to attempting the Synthesis Memo.

Part I: Review

First, review the facts in Hastings’ case in HASTINGS CASE FACTS: Projects 1,2,3,4 in Content.

Review the background information Chong has given you (see links in Overview, weeks 1,2,3).

Review the three cases central to Hastings’ case:

Deering Woods Condominium Association, 377 Md. 250
Joseph, 173 Md. App. 305
Maans, 161 Md. App. 620
Part II: Synthesis Memo Preparation (for Project 1):

Respond a detailed response to the following questions re: Hastings’ case. Responses must be specific and detailed information, more than merely repeating information from assigned readings.

1. Explain the purpose of the first section, the Introduction, of the Synthesis Memo.

a. Analyze and outline what you will include in the Introduction section of the Synthesis Memo.

2. Explain the purpose of the second section, the Synthesis of the Rationales, of the Synthesis Memo.

a. Analyze and outline what you will include in the Synthesis of the Rationales section of the Synthesis Memo.

3 Explain the purpose of the third section, the Individual Holdings, of the Synthesis Memo.

a. Analyze and outline what you will include in the Individual Holdings section of the Synthesis Memo.

4. Explain the purpose of the final section, the Synthesis of the Holdings, of the Synthesis Memo.

a. Analyze and outline what you will include in the Synthesis of the Holdings section of the Synthesis Memo.

Sample Solution

Among the results that could have affected income and expense of the bank, the following are listing :

  • Probable chances of high short-term interest rates, shortening margins and creating fund problem due to increase in costs.
  • A possible increase in variable, cost due to the fact that financial environments have become highly competitive.
  • The possibilities of market ability for tax exempted securities along with credit problem arising.
  • Rare occurrence of comparatively low interest rate, murky income compared to high interest rates.
  • A risk that, successful innovators will be focused on expansion, both inside and outside their trading areas which can result in generation loss for banks.

Hence, from all the factors given above we can identify internal and external factors as the two main factors that determine the performance of banks.

Internal determinants are factors that can be controlled by management. These factors are obtained from accounts (balance sheet, income and expenditure statement) and thus can be termed as micro or bank specific determinants of bank profitability.

Factors that are beyond the control of management are stated as external determinants. These determinants are factors that are not correlated to bank management but reveal legal and economic environment that effects the operation and performance of financial institutions. They are further limited into industry -specific and macroeconomic factors.

Determinants of Bank Performance:

In general the banks performance would be gauged by taking into various factors into considerations. They are:

  • Market share and market concentration.

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