Bank Assets, Loan Portfolios and Performance Ratios

By State and Asset Size, 1997

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Loan Portfolio
Performance Ratios
Capital as a Percent of Assets
Ninth District Banks

Loan Portfolio

Loan Categories as a Percent of Total Loans, December 31, 1997*

Area

Commercial
& Industrial

Agricultural

Real
Estate

Loans to
Individuals

Other
Loans

Minnesota

18.7
26.7
39.3
13.0
2.3

Montana

20.7
28.9
36.3
12.9
1.1

North Dakota

14.7
52.7
17.1
12.7
2.8

South Dakota

16.1
50.1
18.9
13.8
1.1

Northwestern Wisconsin

17.2
13.0
57.2
10.3
2.3

U.P. Michigan

17.4
0.5
63.4
15.6
2.9

Asset Size

Commercial
& Industrial

Agricultural

Real
Estate

Loans to
Individuals

Other
Loans

Over $300 Million

20.8
11.8
41.9
20.1
5.4

Between $150 and $300 Million

24.6
13.1
47.0
12.7
2.7

Between $50 and $149.99 Million

18.7
22.0
44.6
12.3
2.4

Between $25 and 49.99 Million

17.0
34.2
34.6
12.3
2.0

Under $25 Million

16.2
42.4
27.0
13.0
1.4

The distribution of loans was calculated from totals within each area and size category.

Loans

Loans indicate how banks are deploying their funds. Therefore, total loans are accompanied by a relative breakdown of a bank's loans into five categories. These categories are:

Commercial and Industrial—loans to businesses.

Agricultural—includes both agricultural production and agricultural real estate loans.

eal Estate—loans secured by real estate, except for agricultural real estate.

Loans to Individuals—loans for household, family and other personal expenditures.

Other Loans


Performance Ratios

Averages by Area and Bank Size, December 31, 1997*

Area

Return on
Average Assets**

Return on
Equity**

Net
Interest
Margin**

Loans to
Deposits

Noncurrent
Loans to
Total Loans

Minnesota

1.2
12.6
4.8
71.3
0.9

Montana

1.3
13.9
5.4
70.7
1.5

North Dakota

1.1
11.0
4.7
68.9
1.4

South Dakota

1.3
12.6
5.6
73.8
1.5

North-
western Wisconsin

1.3
13.9
4.6
75.8
1.1

U.P. Michigan

1.2
11.7
5.1
78.8
1.0

 **Annualized


Asset Size

Return on
Average Assets**

Return on
Equity**

Net
Interest
Margin**

Loans to
Deposits

Noncurrent
Loans to
Total Loans

Over $300 Million

1.6
19.6
4.8
88.5
0.9

Between $150 and $300 Million

1.4
16.0
5.6
74.8
0.8

Between $50 and $149.99 Million

1.3
13.9
4.9
74.3
1.0

Between $25 and 49.99 Million

1.2
12.0
4.8
68.7
1.2

Under $25 Million

1.0
10.0
4.9
69.5
1.2

 **Annualized

*The averages are the arithmetic mean of the ratios for banks within each area and size category.


Performance Measures

Profitability

Lending and Loan Quantity

Return on Average Assets—a bank's net income divided by its assets; it indicates how well management is using a bank's assets.

Return on Equity—a bank's net income divided by shareholders' equity; it tells what a bank is earning on its shareholders' investment.

Net Interest Margin—the spread between a bank's interest income and its interest expense; it is roughly analogous to a business' profit margin.

Loan-to-Deposit Ratio—the percent of its deposits a bank is lending; it is a measure of bank liquidity, i.e., indicates a bank's potential to expand lending.

Noncurrent Loans to Total Loans—noncurrent loans are loans and leases past due 90 days or more, plus nonaccrual loans and leases; it is an indicator of loan quality.


 

Capital as a Percent of Assets

Averages by Area and Bank Size, December 31, 1997*

Area

Percent

Asset Size

Percent

Minnesota

15.4

Over $300 Million

10.6

Montana

15.5

Between $150 and $300 Million

12.8

North Dakota

16.7

Between $50 and $149.99 Million

14.3

South Dakota

17.7

Between $25 and $49.99 Million

16.2

Northwestern Wisconsin

14.8

Under $25 Million

18.4

U.P. Michigan

17.2

 

 

*Averages are the arithmetic mean of the ratios for banks within each area and size category.

Capital
Capital, shareholders' equity in a bank, is the difference between total assets and total liabilities, and it serves as a "shock absorber" to soak up losses in bank loans and other assets.

Capital to Asset Ratio
A bank's capital divided by its assets; generally a bank with a higher capital ratio is better protected against losses than a bank with a lower ratio.


Ninth District Banks*

December 31, 1997*

Area

# of Banks

Asset Size

# of Banks

Minnesota

515

Over $300 Million

41

Montana

96

Between $150 and $300 Million

62

North Dakota

117

Between $50 and $149.99 Million

283

South Dakota

98

Between $25 and $49.99 Million

302

Northwestern Wisconsin

92

Under $25 Million

259

U.P. Michigan

29

 

*Includes all insured commercial banks except those operating primarily as clearing centers for credit card transactions and other special-purpose banks.

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