Bank Analysis School Case Study eBook

Sunny State Bank

EARNINGS - NONINTEREST INCOME

% Avg. Assets

Noninterest Income/Average Assets

0.76% 0.75%

0.72%

0.70%

(All)

0.68%

20X9Q2

0.64%

Metrics

0.60%

20X9Q3

0.60%

Bank State All Banks

20X9Q4

0.56%

0.53%

20X0Q1

0.52%

0.50%

20X0Q2

0.48%

0.46%

0.46%

20X0Q3

20X9Q4

20X0Q4

20X1Q4

20X2Q4

20X3Q4

20X4Q4

20X5Q4

Amounts

Noninterest Income Amounts

20X5

Year

2017

120K

(All)

100K

20X9Q2

Metrics

80K

20X9Q3

Other Inv. Advisory/Insurance/Trust Deposit Service Charges Mortgage Banking

60K

20X9Q4

20X0Q1

40K

20X0Q2

20K

20X0Q3

0

20X0Q4

20X4Q1

20X4Q2

20X4Q3

20X4Q4

20X5Q1

20X5Q2

20X5Q3

20X5Q4

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 refnance.

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