Bank Analysis School - Case Study & Resources

EARNINGS - OVERHEAD COSTS (cont.)

Sunny State Bank

Personnel Expenses/Average Assets

1.85% 1.85%

1.73%

1.75%

1.68%

Metrics

1.63%

1.62%

1.65%

Bank

1.55%

State

1.52%

All Banks

1.45%

20 X9 Q4

20 X0 Q4

20 X1 Q4

20 X2 Q4

20 X3 Q4

20 X4 Q4

20 X5 Q4

Occupancy Expenses/Average Assets

0.52%

0.50%

0.52%

0.52%

0.47%

0.48%

0.44%

0.44%

0.41%

0.39%

0.40%

0.36%

0.32%

20 X9 Q4

20 X0 Q4

20 X1 Q4

20 X2Q4

20 X3 Q4

20 X4Q4

20 X5 Q4

Other Operating Expenses/Average Assets

2.00%

1.84%

1.80%

1.59%

1.57%

1.52%

1.52%

1.60%

1.47%

1.45%

1.40%

1.20%

1.00%

20 X9 Q4 20 X5 Q4 The UBPR breaks noninterest expenses into three categories: personnel, occupancy, and other. While lower overhead costs benefit earnings performance, keep in mind that if management tries to keep overhead costs extremely low, there may not be enough staff or resources to have good compliance and risk management practices. Average Personnel Expenses Per Employee & Asset Per Employee are additional ratios which can be found on page 3 of the UBPR. 20 X0 Q4 20 X1 Q4 20 X2 Q4 20 X3 Q4 20 X4 Q4