Bank Assets: Investment securities
• Short-term investments
– Interest-bearing bank balances (deposits due from other banks)
– federal funds sold – securities purchased under agreement to resell (RPs) – Treasury bills – municipal tax warrants
100 100 Total
100 100
PNC Bank (12/31/2000, TA: 63 bn) v.s. Community National Bank (12/31/00, TA: 0.1bn)
Asset (%)
ies(%)
PNC CNB
PNC CNB
Loans
78.0 64.9 Deposits
amounts
Bank Liabilities
• The characteristics of various debt instruments differ in terms of
– check-writing capabilities – interest paid – maturity – whether they carry FDIC insurance – whether they can be traded in the secondary
• They also exhibit the highest default risk and are relatively illiquid.
Loans: Categories
• Real estate loans • Commercial loans • Loans to individuals • Agricultural loans • Other loans in domestic offices • Loans and leases in foreign offices • Three adjustments
第二章 商业银行经营评价
• Balance Sheet • Income Statement • Relationship between Balance Sheet and
Income Statement • Return on Equity Model • 股份制商业银行风险评级体系(04年2月22
Asset (%)
Liabilities(%)
CN US
CN US
Loans
60.2 61.4 Deposits
81.4 65.8
Investments 6.6 23.1 Borrowings 14.9 27.2
Cash
24.8 9.1
Other
8.4 7.4 Capital
3.8 7.1
Total
72.8 91.7
Investments 8.7 25.6 Borrowings 18.9 1.0
Cash
5.6 5.7
Other
7.7 3.9 Capital
8.3 7.3
Total
100 100 Total
100 100
Bank Assets: Loans
• Loans are the major asset in most banks’ portfolios and generate the greatest amount of income before expenses and taxes.
• Long-term investment: notes and bonds
– Treasury securities – Obligations of federal agencies – Mortgage-backed, foreign, and corporate
Bank Assets: Noninterest cash and due from banks
• Unlike deposits, the debt is not federally insured and claims of bondholders are subordinated to claims of depositors.
Capital: Stockholders' equity
– pay interest set by each bank without federal restrictions
• Money market deposit accounts (MMDAs)
– pay market rates, but a customer is limited to no more than six checks or automatic transfers each month
Capital: Subordinated notes and debentures
• Notes and bonds with maturities in excess of one year.
– Long-term uninsured debt.
• Most meet requirements as bank capital for regulatory purposes.
perception of their asset quality. – Volatile liabilities or net non-core liabilities include:
• large CDs (over 100,000) • deposits in foreign offices • federal funds purchased • repurchase agreements • other borrowings with maturities less than one year
– Core deposits are more sensitive to the fees charged, services rendered, and location of the bank.
– Core deposits include: demand deposits, NOW accounts, MMDAs, and small time deposits.
• Ownership interest in the bank. • Common and preferred stock are listed at
PNC 37.0 28.8 5.6 0.0 7.3 0.5 - 0.2 - 1.0 78.0
CNB 37.0 19.4 4.3
0 4.7 0 0 -0.5 64.9
Bank Assets: Investment securities
• Investment securities are held to
• It consists of
– vault cash, – deposits held at Federal Reserve Banks – deposits held at other financial institutions – cash items in the process of collection
– earn interest, – help meet liquidity needs – speculate on interest rate movements – serve as part of a bank’s dealer functions.
• The administration and transaction costs are extremely low.
Borrowings (volatile funds)
• Large, or volatile, borrowings are liabilities that are highly rate-sensitive.
– Normally issued in uninsured denominations. – Their ability to borrow is sensitive to the markets
– balances issued by a bank subsidiary located outside the U.S.
Core doposits
• Core deposits are stable deposits that are not highly interest rate-sensitive.
market.
Bank liabilities: Deposits
• Demand deposits
– transactions accounts that pay no interest
• Negotiable orders of withdrawal (NOWs) and automatic transfers from savings (ATS) accounts
Bank Assets: Other assets
• Other assets are residual assets of relatively small magnitudes such as
– bankers acceptances – premises and equipment – other real estate owned and other smaller
Bank liabilities: Deposits
• Two general time deposits categories exist:
– Time deposits in excess of $100,000, labeled jumbo certificates of deposit (CDs).