Bank Analysis School - Case Study & Resources

EARNINGS - NONINTEREST INCOME

Sunny State Bank

% Avg. Assets

Noninterest Income/Average Assets

0.76% 0.75%

0.72%

0.70%

(All)

0.68%

0.64%

Metrics

0.60%

0.60%

Bank

State

0.56%

0.53%

All Banks

0.52%

0.50%

0.48%

0.46%

0.46%

20 X9 Q4

20 X0 Q4

20 X1Q4

20 X2Q4

20 X3 Q4

20 X4 Q4

20 X5 Q4

Amounts

Noninterest Income Amounts

Year

20 X2

20 X3

20 X4

20 X5

20 X2 Q1 - 20 X5 Q4

240K

200K

160K

Metrics

Other

120K

Inv. Advisory/Insurance/Trust

80K

Deposit Service Charges

40K

Mortgage Banking

0

20 X2 Q1

20 X2 Q2

20 X2 Q3

20 X2 Q4

20 X3 Q1

20 X3 Q3

20 X3 Q4

20 X4 Q1

20 X4 Q2

20 X4 Q3

20 X4 Q4

20 X5 Q1

20 X5 Q2

20 X5 Q3

20 X5 Q4

20 X3Q2

Noninterest income is largely of a fee nature and may include: deposit service charges, mortgage banking income from selling and/or servicing residential real estate loans, trust department income, investment advisory fees, and insurance commissions. The pie chart above shows the main sources of noninterest income for the selected bank, and page 3 of the UBPR includes a more detailed breakout of amounts. "Other Noninterest Income" may include items such as debit card interchange income, increases in the value of bank-owned life insurance, and other miscellaneous income. Noninterest income is relied upon more heavily in some banks than others. The level of noninterest income will depend on if a particular bank is engaged in activities that generate these sources of income. Keep in mind that it's not uncommon for the level of noninterest income to be volatile. For example, banks may see a surge in income from secondary market loan sales when interest rates decline and homeowners refinance.