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b. Budgeting
Peoples did not prepare budgets until 1991, after being
forced to do so by the FDIC. The budgets were prepared one
quarter at a time by Julia Raibley.
c. Earnings
In the years 1991-93, Peoples enjoyed an unusually high
yield curve, because of the spread between the rates of interest
received on securities and loans over interest paid on savings
accounts and certificates of deposit.
By the time of decedent's death, Peoples had begun
performing interest rate sensitivity analyses; however, its
methods of doing so were criticized as unreliable by the FDIC
examiners.
Peoples did not follow the practice of forecasting its
earnings.
D. Operations
1. Employees
On the valuation date, Peoples had approximately 30
employees, most of whom were in their mid-50's or older. Peoples
had no retirement plan, but it also had no mandatory retirement
age. As a result, Peoples had employees in their 70's and 80's.
In general, Peoples had a good relationship with its employees,
resulting in very little turnover and a median term of employment
of 17-1/2 years. However, there was some friction between
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