Bank Analysis School

Internal Use Only

Income Statement (Broad Categories) Interest Income (loans & investments) Interest Expenses (deposits & borrowings) - Net Interest Income = Noninterest Income (service charges, many other types) + Noninterest Expenses (personnel, occupancy, other) - Provision Expenses “X” Factor - Other Items (securities gains/losses, taxes) + or - = Net Income

Internal Use Only

Learning Objectives

1 – How Banks Make Money 2 – Income Statement 3 – UBPR Ratio Analysis 4 – Budget 5 – Impact on Capital 6 – Risk vs. Return