Bank Analysis School - Case Study & Resources

SECURITIES APPRECIATION/DEPRECIATION

Sunny State Bank

All Securities Appreciation/Depreciation % of Portfolio

AFS Securities Appreciation/Depreciation % of Portfolio

3.00% 3.00%

3.0% 3.0%

2.00%

2.0%

1.00%

1.0%

0.15%

0.2%

0.00%

0.0%

Metrics

(0.4%)

(0.44%)

Bank

(1.00%)

(1.0%)

State

(1.70%)

(1.7%)

All Banks

(2.00%)

(2.0%)

(2.68%)

(2.7%)

(3.00%)

(3.0%)

(3.10%)

(3.1%)

(3.37%)

(3.4%)

(4.00%)

(4.0%)

20 X9 Q4 20 X0 Q4 20 X1 Q4 20 X2 Q4 20 X3 Q4 20 X4 Q4 20 X5 Q4 All Securities Appreciation/Depreciation % of Tier 1 Capital

20 X9 Q4 20 X0Q4

20 X1Q4

20 X2 Q4 20 X3 Q4 20 X4Q4

20 X5 Q4

AFS Securities Appreciation/Depreciation % of Tier 1 Capital

16.00% 14.25%

16.00% 14.25%

12.00%

12.00%

8.00%

8.00%

4.00%

4.00%

0.61%

0.61%

(1.58%)

(1.58%)

0.00%

0.00%

(4.00%)

(4.00%)

(7.03%)

(7.03%)

(8.00%)

(8.00%)

(12.00%)

(12.00%)

(10.32%)

(10.32%)

(13.01%)

(13.01%)

(15.63%)

(15.63%)

(16.00%)

(16.00%)

20 X9Q4

20 X0 Q4 20 X1Q4

20 X2 Q4 20 X3Q4

2 0X4 Q4 20 X5Q4

20 X9 Q4 20 X0 Q4 20 X1 Q4 20 X2 Q4 20 X3 Q4 20 X4Q4

20 X5Q4

Bond portfolio appreciation or depreciation reflects changes in the market value of bonds due to various factors. Interest rate fluctuations are a primary cause: as interest rates rise, bond prices generally fall (depreciation), and as rates fall, bond prices generally rise (appreciation). Additionally, the term structure of bonds influences their sensitivity to interest rate changes, with longer-term bonds being more affected by interest rate changes. The charts on the left side reflect appreciation/depreciation for all bonds while the charts on the right reflect these figures for only AFS bonds.