Bank Analysis School Case Study

Sunny State Bank

LIQUIDITY - LOANS TO ASSETS & DEPOSITS

Net Loans to Assets Ratio

72.0%

68.0%

64.0%

Metrics

60.0%

Bank State All Banks

55.7% 55.8%

55.2% 54.8%

55.2%

56.0%

54.4%

54.4% 54.9%

54.4%

54.1% 54.4% 54.7%

53.5%

52.8%

52.0%

51.0% 50.4%

52.0%

49.2% 49.6% 49.5%

50.2%

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

Net Loans to Core Deposits

88%

84%

80%

76%

72%

68%

68%

65%

65% 65% 65%

65% 65%

64%

64% 65% 64%

64%

64%

63%

64%

62%

64%

61%

60% 60%

60% 60%

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

• Since loans are generally illiquid, the Loans to Assets Ratio will typically move inversely of changes in liquid assets. For example, higher loan volume as a percentage of assets would lead to a lower amount of liquid assets as a percentage of assets. • A high Loans to Core Deposits Ratio would indicate the liquidity position is tight while a low ratio would indicate the level of core deposits has been sufficient to fund loan demand without much need for wholesale funding. Note that this is a custom ratio and differs from the Loans to Deposits Ratio in the UBPR (numeratior is the same but denominator has been adjusted to exclude listing service deposits and include TCDs>250M.