Bank Analysis School Case Study eBook
Sunny State Bank
LOAN LOSS HISTORY
Net Loan Losses/Average Loans
0.50%
(All)
20X9Q2
0.40%
20X9Q3
0.32%
0.30%
Metrics
20X9Q4
0.30%
Bank State All Banks
20X0Q1
0.18%
0.20%
20X0Q2
0.19%
0.10%
20X0Q3
0.10%
20X0Q4
0.02%
20X1Q1
20X9Q4
20X0Q4
20X1Q4
20X2Q4
20X3Q4
20X4Q4
20X5Q4
20X1Q2
Recoveries to Prior Credit Losses
20X1Q3
450.0%
445.5%
20X1Q4
400.0%
20X2Q1
350.0%
20X2Q2
300.0%
20X2Q3
250.0%
20X2Q4
200.0%
20X3Q1
150.0%
20X3Q2
100.0%
41.6%
20X3Q3
50.0%
5.1%
6.6%
6.7%
4.1%
20X3Q4
20X9Q4
20X0Q4
20X1Q4
20X2Q4
20X3Q4
20X4Q4
20X5Q4
• Net loan losses = gross loan losses - recoveries. Past loan losses are often a sign of poor underwriting and/or credit administration. The next page shows net loan losses for particular loan types. • Recoveries to Prior Credit Losses = loan recoveries in the current year / gross loan losses in the preceding year. A low amount of recoveries could indicate management is slow to recognize loan losses (waiting until there is very little chance of recovery before charging loans off the books).
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