Bank Analysis School September 2023 - Presentations & Resources

Internal Use Only

Which Resulted in Inaccurate Earnings Simulation Projections

The 12/31/2021 modeling (+400 basis point ramped scenario) projected net interest income would decrease 6.3%

Actual 2022 net interest income increased 24.0%

Lesson : Deposit beta assumptions are critical to the accuracy of earnings simulations and should be bank-specific.

Internal Use Only

Economic Value of Equity Results at Tostitos Bank Didn’t Align with the Balance Sheet Structure

At the last exam, EVE was shown to drop 50% in this same scenario! Lesson: Non-maturity deposit decay rates/average lives drive EVE results and can be manipulated to mask the risk of a long-term asset structure.