Higher Education

Bank Management, 8th Edition

  • Timothy W. Koch University of South Carolina
  • S. Scott MacDonald Southern Methodist University
  • ISBN-10: 1133494684  |  ISBN-13: 9781133494683
  • 800 Pages
  • Previous Editions: 2010, 2006
  • © 2015 | Published
  • College Bookstore Wholesale Price = $226.50
  *Why an online review copy?
  • It's the greener, leaner way to review! An online copy cuts down on paper and on time. Reduce the wait (and the weight) of printed texts. Your online copy arrives instantly, and you can review it anytime from your computer or favorite mobile device.

If you prefer a print copy to review, please contact your representative.



Closely examine the impact of today's changing, competitive environment on commercial banks and banking services, as well as the entire financial services industry, with Koch/MacDonald's BANK MANAGEMENT, 8E. This new edition reflects the latest changes and developments, from complete regulatory updates to details of the many programs evolving amidst today's financial crises. Whether your students are practicing or future professionals, they will gain a better understanding of the risks associated with loans and securities, the process of securitization, excessive leverage and inadequate liquidity. Core business models demonstrate value core operating earnings versus trading as well as price- and volume-driven profits. The book provides a framework for developing effective strategies that ensure a proper balance between management's profit targets and allowable risk taking. The book's unique approach to understanding commercial bank management from a decision-making perspective presents actual bank managers making strong financial decisions. Your students clearly see how decisions in one area affect performance and opportunities in other areas. Students gain a solid foundation in the key issues confronting managers today as they become familiar with basic financial models used to formulate decisions and better understand the strengths and weaknesses of data analysis. With the help of this latest edition, students develop the logical thought processes needed to achieve strong financial and management results.

Features and Benefits

  • This new edition reflects complete regulatory updates throughout. This edition closely examines the many programs evolving from the financial crisis to provide liquidity to today's banking system. The book highlights the Troubled Asset Relief Program, Term Securities Lending Facility and related programs as well as many of the most recent regulatory actions.
  • AUTHORS CLOSELY EXAMINE THE SUBPRIME MORTGAGE CRISIS --This edition provides a thorough, insightful analysis of today's subprime mortgage crisis, its impact on financial institutions and the economy as well as regulatory responses.
  • COMPARISONS PROVIDE UP-TO-DATE EVALUATION OF COMMERCIAL BANK PERFORMANCE --This edition provides the latest, comprehensive evaluation of commercial bank performance and its impact on the analyst's job of evaluating performance.
  • FOCUS ON DECISION-MAKING AND UNDERSTANDING COMMERCIAL BANK MANAGEMENT --Key chapters address the specific aspects of an issue or problem, explain how a financial model or decision framework applies, and then demonstrate the application of the model of framework using sample data.
  • ONE-OF-A-KIND FOCUS ON CASH FLOW ANALYSIS HIGHLIGHTS THIS PART OF THE LENDING DECISION --This book remains the only text that focuses on cash flow analysis as part of the lending decision. The authors introduce a comprehensive procedure to generate cash-based income statements, explain how to interpret the results, and provide an approach to forecast a potential borrower's future performance.
  • ADDITIONAL MATERIAL HAS BEEN ADDED TO ADDRESS THE CHANGING FINANCIAL SERVICES INDUSTRY LANDSCAPE -- Chapter 1 is a new chapter, specifically addressing the changes in the financial landscape since the last edition (2009). Chapter 5 addresses the difference in business models of non-traditional banking organizations.
  • MICROSOFT EXCEL TEMPLATES ARE AVAILABLE FOR THOSE WHO WISH TO USE MICROCOMPUTERS TO PERFORM AND EXTEND THE DATA ANALYSIS PRESENTED IN THE BOOK -- The templates provide a generic decision model for applications related to analyzing bank performance and key financial ratios, and cash flow from operations for nonfinancial firms. They also provide a full range of decision models with data for key problems and cases in the text.

Table of Contents

1. Banking and the Financial Services Industry.
2. Government Policies and Regulation.
3. Analyzing Bank Performance.
4. Managing Noninterest Income and Noninterest Expense.
5. The Performance of Nontraditional Banking Companies.
6. Pricing Fixed-Income Securities.
7. Managing Interest Rate Risk: GAP and Earnings Sensitivity.
8. Managing Interest Rate Rick: Duration Gap and Economic Value of Equity.
9. Using Derivatives to Manage Interest Rate Risk.
10. Funding the Bank.
11. Managing Liquidity.
12. The Effective Use of Capital.
13. Overview of Credit Policy and Loan Characteristics.
14. Evaluating Commercial Loan Requests and Managing Credit Risk.
15. Evaluating Consumer Loans.
16. Managing the Investment Portfolio.
17. Global Banking Activities.

What's New

  • DISCUSSIONS HIGHLIGHT THE CHANGING LANDSCAPE OF TODAY'S FINANCIAL SERVICES INDUSTRY --Timely, engaging discussions throughout this edition clearly describe the changing landscape of today's financial services industry. This edition closely explores investment banks evolving into bank holding companies.


All supplements have been updated in coordination with the main title. Select the main title's "About" tab, then select "What's New" for updates specific to title's edition.

For more information about these supplements, or to obtain them, contact your Learning Consultant.

Instructor Supplements

Website  (ISBN-10: 1133494692 | ISBN-13: 9781133494690)

Help your students develop the skills and solid foundation in today's banking and finances that they need for success while you save time with the rich array of online teaching and learning resources on this companion website. You'll find a wealth of password-protected teaching resources, including the Instructor's Manual, Test Bank, PowerPoint slides and Excel spreadsheet templates, available for download as you need them.

Meet the Author

Author Bio

Timothy W. Koch

Timothy W. Koch serves as Professor of Finance at the University of South Carolina. He received his B.A. degree in mathematics from Wartburg College and Ph.D. in economics from Purdue University. He taught at Baylor University and Texas Tech University before joining the University of South Carolina. In addition to his college teaching role, Dr. Koch serves as President of the Graduate School of Banking at Colorado and teaches at several graduate schools for professional bankers throughout the United States. He serves as faculty advisor to the Graduate School of Bank Investments and Financial Management at the University of South Carolina. He has taught seminars on risk management to bankers in Poland, Hungary, Slovakia, and the Ukraine as part of a U.S. Treasury program to assist private banking in Eastern Europe. Dr. Koch's research and writing focus on bank risk management, performance analysis and improvement, the pricing of financial futures and fixed-income securities, and public finance. He has published in a wide range of academic journals, including the Journal of Finance, Journal of Financial & Quantitative Analysis, Journal of Futures Markets, National Tax Journal, Journal of Banking and Finance, Journal of Fixed Income, Journal of Financial Research, Journal of Macroeconomics, Journal of Portfolio Management, Municipal Finance Journal, and the Journal of Money, Credit and Banking. Dr. Koch has also served as Treasurer of the Financial Management Association and President of the Eastern Finance Association and Southern Finance Association. He has written General Banking curriculum for many state-sponsored banking schools and is a frequently requested seminar leader for the banking industry.

S. Scott MacDonald

S. Scott MacDonald serves as President and CEO for the Southwestern Graduate School of Banking (SWGSB) Foundation, Director of the Assemblies for Bank Directors, as well as Adjunct Professor of Finance at the Edwin L. Cox School of Business for Southern Methodist University. Dr. MacDonald received his B.A. in economics from the University of Alabama and his Ph.D. from Texas A&M University. He joined the Southern Methodist University faculty in 1997 and began his responsibilities as Director of the SWGSB Foundation in 1998. Prior to joining SMU, he served as Associate Professor of Finance and Director of the School of Applied Banking at Texas Tech University. Dr. MacDonald spends the majority of his time working directly with the financial services industry. In addition to functioning as Director of the SW Graduate School of Banking, he conducts bank director education programs through the Assemblies for Bank Directors and is a frequently requested speaker, seminar leader and strategic planning facilitator. He is also a consultant for various banking organizations. Dr. MacDonald has also served as an expert resource witness before the Texas State Senate. He is a past chairman of the board of directors for Texas Tech Federal Credit Union, an advisory board member of the Independent Bankers Association of Texas Education Council, and past board member of the North Texas Chapter of the Risk Management Association. Dr. MacDonald has authored numerous articles in academic journals, including the Journal of Financial Economics, The Journal of Business, The Journal of Futures Markets, The Review of Futures Markets, Quarterly Journal of Business and Economics, and the Journal of Money, Credit and Banking. He has also written professional curriculum for industry-sponsored seminars and schools in the financial services industry and has been recognized with numerous teaching and research awards.