BAS Case Study - March 2023
Sunny State Bank
LOAN LOSS HISTORY
Net Loan Losses/Average Loans
0.50%
(All)
2013Q4
0.40%
0.32%
2014Q1
0.30%
Metrics
2014Q2
0.30%
Bank State All Banks
2014Q3
0.20%
2014Q4
0.19%
0.18%
0.10%
2015Q1
0.10%
2015Q2
2015Q3
2013Q4
2014Q4
2015Q4
2016Q4
2017Q4
2018Q4
2015Q4
Recoveries to Prior Credit Losses
2016Q1
450.0%
445.5%
2016Q2
400.0%
2016Q3
300.0% 350.0%
2016Q4
2017Q1
250.0%
2017Q2
200.0%
2017Q3
100.0% 150.0%
2017Q4
41.6%
2018Q1
50.0%
6.6%
6.7%
4.1%
0.0%
2018Q2
2013Q4
2014Q4
2015Q4
2016Q4
2017Q4
2018Q4
• Net loan losses = gross loan losses - recoveries. Past loan losses are often a sign of poor underwriting and/or credit administration. The next page shows net loan losses for particular loan types. • Recoveries to Prior Credit Losses = loan recoveries in the current year / gross loan losses in the preceding year. A low amount of recoveries could indicate management is slow to recognize loan losses (waiting until there is very little chance of recovery before charging loans off the books).
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