Bank Analysis School Case Study eBook

Sunny State Bank

LIQUIDITY - WHOLESALE FUNDING

Wholesale Funding to Total Assets

14.0%

12.5%

12.0%

10.6%

10.0%

8.9%

9.3%

7.7%

8.7%

7.4%

7.3%

8.0%

Metrics

6.4%

6.2%

6.2%

7.7%

5.7% 5.5% 5.5%

5.2%

6.0%

5.0%

4.8%

Bank State All Banks

6.2%

5.4%

4.0%

4.9%

4.9%

4.8%

4.8%

4.7%

4.2%

3.7%

2.0%

20X9Q2

20X9Q3

20X9Q4

20X0Q1

20X0Q2

20X0Q3

20X0Q4

20X1Q1

20X1Q2

20X1Q3

20X1Q4

20X2Q1

20X2Q2

20X2Q3

20X2Q4

20X3Q1

20X3Q2

20X3Q3

20X3Q4

20X4Q1

20X4Q2

20X4Q3

20X4Q4

20X5Q1

20X5Q2

20X5Q3

20X5Q4

Net Noncore Funding Dependency Ratio

20.0%

16.9%

16.0%

13.6%

14.8%

11.5%

11.4%

12.0%

9.4%

10.8%

9.1%

9.0% 9.5%

11.5%

8.2%

8.1%

7.7%

7.0%

9.8%

Metrics

6.8%

7.9%

6.5%

8.0%

Bank State All Banks

6.5%

6.3%

6.0%

5.9%

5.8%

5.7%

4.0%

5.3%

5.0%

0.0%

(4.0%)

20X9Q2

20X9Q3

20X9Q4

20X0Q1

20X0Q2

20X0Q3

20X0Q4

20X1Q1

20X1Q2

20X1Q3

20X1Q4

20X2Q1

20X2Q2

20X2Q3

20X2Q4

20X3Q1

20X3Q2

20X3Q3

20X3Q4

20X4Q1

20X4Q2

20X4Q3

20X4Q4

20X5Q1

20X5Q2

20X5Q3

20X5Q4

• Wholesale funding includes brokered deposits, listing service deposits, FHLB borrowings, other borrowings, and Federal Funds purchased. Note that this is different from what is included as noncore funding on the UBPR. • Reliance on wholesale funding contributes to liquidity risk because these funding sources may not be available in times of fnancial stress. However, the strategic use of a moderate amount of wholesale funding should not be criticized at banks in good fnancial condition with adequate risk management practices. Examiners should be quicker to criticize the use of wholesale funding if there is a lower level of capital, asset quality problems, or weak risk management. • Net Noncore Funding Dependency Ratio matches the UBPR. The UBPR defnition of noncore funding includes: TCDs > insurance limit, brokered deposits, FHLB borrowings, other borrowings, and federal funds purchased.

Made with FlippingBook. PDF to flipbook with ease