Bank Analysis School Case Study eBook

Sunny State Bank

LIQUIDITY - LIQUID ASSETS

Total Liquid Assets to Total Assets

Primary Liquidity to Total Assets

5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 41.4% 42.2%

12.0%

42.0%

40.5%

36.0%

35.0%

10.0%

36.1%

34.6%

31.4%

29.1%

28.5%

8.0%

7.2%

24.9%

24.8%

6.5%

6.3%

27.0%

Metrics

6.1%

25.0%

6.0%

24.4%

5.1%

4.6%

4.5%

Bank State All Banks

4.2%

4.2%

4.2%

3.8%

3.8%

4.9%

4.0%

4.0%

4.6%

4.4%

4.3%

4.1%

4.0%

3.8%

3.7%

3.5%

3.5%

3.3%

2.0%

20X9Q2

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Total Liquid Assets to Total Assets Breakout

Primary Liquidity Breakout

45.0%

6M

5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

5M

4M

Metrics

Metrics

3M

Unpl. Sec FFS IBB Cash

Sec < 1Yr FFS IBB Cash

2M

1M

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• Total liquid assets include unpledged securities, Federal Funds sold, interest-bearing bank balances, and cash & due. Keep in mind that evaluating on-balance sheet liquidity requires nuance and additional analysis. For instance, small nonrated Municipal bonds are considered liquid for this calculation but might be difcult to sell or pledge. All loans are considered illiquid for this calculation, but certain types (such as government guaranteed and conforming 1-4 family loans) might be fairly liquid. • Primary Liquidity consists of Securities maturing in less than one year (both Bonds and MBS), Fed Funds Sold, Interest Bearing Balances and Cash, the idea being that these balance sheet funds are most readily available in time of need with limited cost.