Bank Analysis School - Case Study & Resources

IRR - ASSET MATURITY INFO

Sunny State Bank

Assets > 5 Years / Total Assets

Assets > 15 Years / Total Assets

70%

45.0%

69%

66%

66%

41.2%

64%

39.7%

40.0%

36.5%

60%

34.6%

61%

35.0%

60%

30.0%

50%

Metrics

30.5%

25.0%

Bank

25.2%

24.9%

40%

State

20.0%

All Banks

15.0%

30%

10.0%

20 X9 Q4 20 X0 Q4 20 X1 Q4

20 X2 Q4 20 X3 Q4 20 X4 Q4 20 X5 Q4

20 X9 Q4 20 X0 Q4 20 X1Q4

20 X2 Q4 20 X3 Q4 20 X4 Q4 20 X5 Q4

Assets > 5 Years / Total Assets (By Category)

Assets > 15 Years / Total Assets (By Category)

70%

45%

40%

60%

35%

50%

30%

Metrics

40%

25%

MBS

20%

30%

Loans

15%

Bonds

20%

10%

10%

5%

20 X9 Q4 20 X0 Q4 20 X1 Q4 20 X2 Q4 20 X3 Q4 20 X4 Q4 20 X5 Q4

20 X9 Q4 20 X0 Q4 20 X1 Q4 20 X2 Q4 20 X3Q4

20 X4 Q4 20 X5 Q4

• Holding a large amount of long-term assets often corresponds with risk to rising interest rates, because the yield on long-term assets could be stagnant for a long period while rising interest rates cause funding costs to increase. • Keep in mind that debt securities are typically non-amortizing and tend to have longer durations than amortizing loans and MBS; the implication being that a high amount of long-term debt securities is more concerning than a high amount of long-term loans and mortgage-backed securities (MBS).