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.
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