Bank Analysis School - September 2023

Internal Use Only

Provisions Decimated Earnings During the Financial Crisis

All Commercial Banks in the U.S.

1.00%

Net Income/ Average Assets

0.80%

0.60%

0.40%

0.20%

Provisions/ Average Assets

Internal Use Only

Income Statement (Main Components) 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 + or - Other Items (securities gains/losses, taxes) = Net Income