Bank Analysis School Case Study

Sunny State Bank

CAPITAL - OTHER RATIOS

Div. & Ret. E…

Dividends to Net Income

Retained Earnings to Average Total Equity

140.7%

6.0%

80.0% 100.0% 120.0% 140.0%

3.6%

4.0%

3.1%

1.7%

2.0%

0.5%

(0.7%)

0.0% 20.0% 40.0% 60.0%

0.0%

46.4% 60.3%

38.9%

(2.0%)

0.0%

(4.0%)

(4.8%)

(20.3%)

(20.0%)

(6.0%)

20X0 Q4

20X1 Q4

20X2 Q4

20X3 Q4

20X Q4

20X Q4

20X0Q4

20XQ4

20X2Q4

20X3Q4

20X4Q4

20X5Q4

Equity Capital Growth Rate

Equity Growth Less Asset Growth

15.0%

12.0% 16.0%

10.0% 15.0% 20.0%

17.6%

13.5%

13.9%

9.1%

0.0% 4.0% 8.0%

5.9%

4.7%

7.1%

7.1%

3.0%

0.0% 5.0%

6.6%

2.4%

3.4%

1.5%

0.2%

1.8%

1.2% 0.9%

(4.7%)

1.5%

(2.4%)

(6.2%)

0.2%

(25.0%) (20.0%) (15.0%) (10.0%) (5.0%)

(8.1%)

(4.7%)

(16.0%) (12.0%) (8.0%) (4.0%)

(4.3%)

(6.8%)

(10.9%)

(11.3%)

(6.2%)

(4.4%)

(10.2%)

(11.3%)

(8.3%)

(8.8%)

(7.3%)

(21.9%)

(12.7%)

(14.9%)

20X0 Q4

20X1 Q1

20X1 Q2

20X1 Q3

20X1 Q4

20X2 Q1

20X2 Q2

20X2 Q3

20X2 Q4

20X3 Q1

20X3 Q2

20X3 Q3

20X3 Q4

20X4 Q1

20X4 Q2

20X4 Q3

20X4 Q4

20X5 Q1

20X5 Q2

20X5 Q3

20X5 Q4

20X0 Q4

20X1 Q1

20X1 Q2

20X1 Q3

20X1 Q4

20X2 Q1

20X2 Q2

20X2 Q3

20X2 Q4

20X3 Q1

20X3 Q2

20X3 Q3

20X3 Q4

20X4 Q1

20X4 Q2

20X4 Q3

20X7 Q4

20X5 Q1

20X5 Q2

20X5 Q3

20X5 Q4

The ratios on this page relate to dividends, retained earnings, capital growth, and asset growth. Keep in mind that a high level of dividends could impact the ability to grow capital (net income - dividends = retained earnings). Also be mindful that asset growth will impact capital ratios since the denominator for capital ratios is assets (either average total assets or risk weighted assets). If Equity Growth Less Asset Growth is positive, capital ratios will likely improve and vice versa. ■ Bank ■ State ■ All Banks