BAS Case Study - March 2023
Sunny State Bank
EARNINGS - NET INTEREST MARGIN
Date Range (all ratios on page)
2014Q4 - 2018Q4
Net Interest Margin
4.24%
4.21%
4.20%
4.10%
3.97%
3.96%
4.00%
3.93%
Metrics
Bank State All Banks
3.80%
3.85%
3.71%
3.70%
3.64%
3.75%
3.73%
3.57% 3.58%
3.60%
3.57%
3.60%
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
2016Q2
2016Q3
2016Q4
2017Q1
2017Q2
2017Q3
2017Q4
2018Q1
2018Q2
2018Q3
2018Q4
Yield on Assets
Cost of Funds
0.40% 0.45% 0.50% 0.55% 0.60% 0.65% 0.70%
4.80%
4.73%
4.64%
4.60%
4.53%
0.55%
4.41%
0.53%
4.40%
4.38% 4.28%
4.35%
0.52%
0.53%
4.23%
0.48%
0.46%
4.20%
0.44%
4.18%
0.43%
0.43%
4.10%
0.42%
4.18%
4.16%
4.15%
0.44%
0.44%
4.05%
0.43%
0.42%
0.42%
4.00%
0.40%
3.99%
2014Q4 2018Q4 • The Net Interest Margin (NIM) is calcluated as net interest income divided by average earnings assets. Tax-equivalent adjustments are made to enable meaningful comparisons for banks that have tax-exempt income. This ratio measures the profitability of the bank’s primary activities of obtaining funds and making loans and investing (buying and selling money). • The Yield on Assets and Cost of Funds ratios are sub-components of the NIM. The Yield on Assets is calculated as Interest Income/Average Earning Assets and Cost of Funds is calculated as Interest Expenses/Average Earning Assets. Yields and costs related to specific asset and liability categories on Page 3 of the UBPR can be further analyzed to determine the root causes of NIM changes. These ratios may change for a variety of reasons. For example, management may have restructured the balance sheet, the interest rate environment may have changed, or bank loan and deposit pricing became more or less competitive. 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3
Made with FlippingBook Online newsletter creator