Bank Analysis School - September 2023

Internal Use Only

Interest Rate Changes Affect Asset Yields and Funding Costs

9.0%

7.5%

6.0%

4.5%

Yield on Earning Assets

3.0%

1.5%

Cost of Funding Fed Funds Rate

1992

1995

1998

2001

2004

2007

2010

2013

2016

2019

Internal Use Only

Interest Rate Risk is a Threat to the Net Interest Margin and Net Interest Income