CMS Case Study

 An increase in loan volume of approximately $52,502k and a decrease in yield of 10 bps. This contributed to an increase in interest income of approximately $2,218k over expectation;  An increase in securities of $8,728k along with a decrease in yield of 41 bps contributed to a $392k decrease in projected interest income on securities;  The Bank had an increase in interest bearing deposits of $90,951k and a decrease in yield of 257 bps leading to a $9k increase in interest income over projections;  A decrease in fed funds sold of $2,375k combined with a decrease in expected yield of 42 bps led to interest income of $78k less than projected;  Savings and interest bearing DDAs were $15,286k less than expected for 2020. The related cost of these funds was 226 bps lower than projected. This led to a $821k decrease in interest expense compared to forecasted;  The Bank had a decrease in time deposits of $17,500k while interest costs were 26 bps less than projected causing interest expense to be $590k less than projections;  The Bank’s short term borrowings were $10,000k more than forecasted while the costs of these funds were 27 bps less than expected. This led to $35k more in interest expense than projected; and  The Bank’s fed funds purchased were $9,720k more than projected and the cost of funds were 20 bps less than forecasted. Interest expense was $35k over expectations.

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