BAS Case Study - March 2023

Sunny State Bank

EARNINGS - ASSET YIELDS

Date Range (all ratios on page)

2014Q4 - 2018Q4

Yield on Loans

5.56%

5.10% 5.20% 5.30% 5.40% 5.50% 5.60%

5.54%

5.49%

5.49%

5.44%

5.41% 5.35%

5.31%

5.29%

5.35%

5.30%

5.24%

Metrics

5.29%

5.25%

5.25%

Bank State All Banks

5.18%

5.11%

5.00%

2014Q4

2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

Yield on Securities

4.00%

3.66%

3.60%

3.39%

3.20%

2.93%

2.80%

2.63%

2.58%

2.52%

2.67%

2.41%

2.35% 2.33% 2.32% 2.40%

2.40%

2.42%

2.26%

2.22%

2.00%

2.03%

1.79%

2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4

Higher yielding loan and securities portfolios benefit the NIM but could be indicative of higher-risk (high risk = high expected return). Strong loan volume typically has a positive impact on the NIM, and vice versa, because loans are typically the highest-yielding asset category. A chart showing the Net Loans to Assets Ratio can be found in the Liquidity section of this report.