Wholesale cds 606 325 18 fed funds and rps 370 968 19

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17. Wholesale CDs 6.06 3.25 18. Fed funds and RPs 3.70 9.68 19. Other borrowed funds 3.38 9.00 20. Subordinated notes and debentures 1.18 1.03 Noninterest Expense as a Percentage of Total Operating Income 21. Salaries and employee benefits 20.26% 14.08% 22. Expenses of premises and fixed assets 9.09 3.52 23. Other noninterest expenses 10.15 12.66 Liability Yields 24. NOW accounts 3.42% 2.22% 25. MMDAs and other savings 1.59 1.69 26. Foreign deposits 0.33 3.12 27. Retail CDs 4.50 4.70 28. Wholesale CDs 4.07 4.40 29. Fed funds and RPs 4.97 5.29 30. Other borrowed funds 7.34 4.45 31. Subordinated notes and debentures 7.02 5.40 Liability Accounts as a Percentage of Total Assets 32. Demand deposits 2.09% 4.72% 33. NOW accounts 1.17 0.64 34. MMDAs 26.08 14.69 35. Other savings 15.23 9.19 36. Foreign deposits 1.07 12.78 37. Retail CDs 21.31 6.47 38. Core deposits 66.95 48.49 39. Wholesale CDs 10.55 5.84 40. Fed funds and RPs 5.28 14.47 41. Other borrowed funds 3.25 15.98 42. Subordinated notes and debentures 1.19 1.51 43. Purchased funds 20.27 37.80 44. Other liabilities 1.03 2.99 Liability Items as a Percentage of Interest-Bearing Liabilities 45. NOW accounts 1.38% 0.79% 46. MMDAs 30.63 18.01 47. Other savings 17.90 11.26 48. Foreign deposits 1.25 15.67 49. Retail CDs 25.03 7.93 50. Wholesale CDs 12.39 7.16 51. Fed funds and RPs 6.20 17.74 52. Other borrowed funds 3.82 19.59 53. Subordinated notes and debentures 1.40 1.85 Noninterest Expense as a Percentage of Noninterest Income 54. Salaries and employee benefits 110.94% 47.59% 55. Expenses of premises and equipment 56.87 11.90 56. Other noninterest income 63.54 42.79 Noninterest Expense as a Percentage of Total Assets 57. Salaries and employee benefits 1.43% 1.11% 58. Expenses of premises and equipment 0.64 0.28 59. Other noninterest income 0.72 1.00
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Appendix 2B Commercial Banks’ Financial Statements and Analysis 27 These ratios measure the proportion of total operating income that goes to pay the particular expense item. The values of these ratios for Webster Financial Bancorp and Bank of America are as follows: Webster Financial Bancorp Bank of America Interest expense ratio 455.58 996.72 189.56 38.40% 42,297.90 80,161.52 33,673.20 37.16% Provision for loan loss ratio 13.50 996.72 189.56 1.14% 6,066.84 80,161.52 33,673.20 5.33% Noninterest expense ratio 468.54 996.72 189.56 39.50% 34,439.72 80,161.52 33,673.20 30.25% Tax ratio 82.32 996.72 189.56 6.94% 10,420.98 80,161.52 33,673.20 9.15% The sum of the numerators of these four ratios subtracted from the denomi- nator (total operating income) is the bank’s net income. 19 Thus, the lower any of these ratios, the higher the bank’s profitability (PM). As mentioned, how- ever, although a low value for any of these ratios produces an increase in the bank’s profit, it may be indicative of a problem situation in the bank. Thus, an even more detailed breakdown of these ratios may be warranted. For example, the interest expense ratio can be broken down according to the various interest expense-generating liabilities (ratios 13–20 in Table 2B–6; e.g., interest on NOW accounts/total operating income). Additionally, the noninterest expense ratio may be broken down according to its components (ratios 21–23—e.g., salaries and benefits/total operating income). These ratios allow for a more detailed examina- tion of the generation of the bank’s expenses.
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