CFNL » Topics » Net Interest Income

This excerpt taken from the CFNL 10-Q filed May 11, 2009.

Net Interest Income

 

Net interest income represents the difference between interest and fees earned on interest-earning assets and the interest paid on deposits and other interest-bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates. Net interest income for the three months ended March 31, 2009 and 2008 was $10.6 million and $10.3 million, respectively, a period-to-period increase of $284,000, or 3%. The yields on both our assets and liabilities fell during the quarter as interest rates decreased.  During 2008 and 2009, we have primarily been liability sensitive, which means that we have more liabilities repricing than assets in the current decreasing interest rate environment, which has allowed us to maintain our net interest margin in this decreasing rate environment.

 

Specifically, interest income on loans receivable decreased $1.3 million for the three months ended March 31, 2009 compared to the same three month period of 2008.  Interest income on investment securities decreased $727,000 for the three months ended March 31, 2009 as compared to the three months ended March 31, 2008.  The decrease in interest income on loans receivable is directly related to the current decreased interest rate environment.  The decrease in interest income on investment securities is directly related to the lower balances of investment securities we hold due to the securities sales and calls that have occurred over the past year.  Total interest expense has decreased $2.9 million for the three months ended March 31, 2009 as compared to the same period of 2008.  The decrease in total interest expense is mostly related to the decreases we have taken in the interest rates we pay on our interest checking and savings deposit accounts.

 

We have certain loans and investment securities for which a portion of the income realized is tax-exempt.  Net interest income on a tax equivalent basis for the three months ended March 31, 2009 and 2008 was $10.7 million and $10.4 million, respectively.

 

Our net interest margin, which equals net interest income divided by average earning assets, was 2.61% and 2.69% for the three months ended March 31, 2009 and 2008, respectively.  The decrease in the net interest margin for the three months ended March 31, 2009 compared to the same periods of 2008 is a result of a greater decrease in yields earned for average earning assets over the decrease in the cost of our interest-bearing liabilities, a direct result of the current interest rate environment.  Tables 1 and 2 present an analysis of average earning assets and interest-bearing liabilities with related components of interest income and interest expense on a tax equivalent basis.

 

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This excerpt taken from the CFNL 10-Q filed Nov 7, 2008.

Net Interest Income

 

Net interest income represents the difference between interest and fees earned on interest -earning assets and the interest paid on deposits and other interest-bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates. Net interest income for the three months ended September 30, 2008 and 2007 was $11.3 million and $10.3 million, respectively, a period-to-period increase of $947,000, or 9%. For the nine months ended September 30, 2008 and 2007, net interest income was $32.7 million and $30.4 million, respectively, an increase of $2.3 million, or 7%.  The increase in net interest income is primarily the result of a greater decrease in our cost of interest-bearing liabilities than our decrease in the yields earned for average earning assets.  During 2008, we have been liability sensitive, which means that we have more liabilities repricing than assets in the current decreasing interest rate environment, which has contributed to the improvement in our net interest margin.

 

Specifically, interest income on loans held for sale decreased $2.5 million for the three months ended September 30, 2008 compared to the same three month period of 2007.  For the year-to-date period ending September 30, 2008, interest income on loans held for sale decreased $8.2 million as compared to the year-to-date period of 2007.  The decrease in interest income on loans held for sale is directly related to decreased volumes of loans sold due to the ongoing deterioration in the residential real estate market.  Total interest expense has decreased $4.5 million and $9.5 million for the three and nine months periods ending September 30, 2008 as compared to the same periods of 2007.  The decrease in total interest expense is mostly related to short-term certificates of deposit which have matured and repriced at lower rates over the three and nine months periods of 2008.

 

We have certain loans and investment securities for which a portion of the income realized is tax-exempt.  Net interest income on a tax equivalent basis for the three months ended September 30, 2008 and 2007 was $11.4 million and $10.4 million, respectively.  For the nine months ended September 30, 2008 and 2007, net interest income on a tax equivalent basis was $33.1 million and $30.7 million, respectively.

 

Our net interest margin, which equals net interest income divided by average earning assets, was 2.96% and 2.65% for the three months ended September 30, 2008 and 2007, respectively.  For the year to date September 30, 2008 and 2007, our net interest margin was 2.84% and 2.63%, respectively.  The increase in the net interest margin for the three and nine months ended September 30, 2008 compared to the same periods of 2007 is a result of a greater decrease in the cost of interest-bearing liabilities than the decrease in yields earned for average earning assets.  Tables 1 through 4 present an analysis of average earning assets and interest-bearing liabilities with related components of interest income and interest expense on a tax equivalent basis.

 

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Table of Contents

 

Table 1.

 

This excerpt taken from the CFNL 10-Q filed Aug 8, 2008.

Net Interest Income

 

Net interest income represents the difference between interest and fees earned on interest -earning assets and the interest paid on deposits and other interest-bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates. Net interest income for the three months ended June 30, 2008 and 2007 was $11.0 million and $10.2 million, respectively, a period-to-period increase of $813,000, or 8%. For the six months ended June 30, 2008 and 2007, net interest income was $21.4 million and $20.1 million, respectively, an increase of $1.3 million, or 7%.  The increase in net interest income is primarily the result of a greater decrease in our cost of interest-bearing liabilities than our decrease in the yields earned for average earning assets.  We have certain loans and investment securities for which a portion of the income realized is tax-exempt.  Net interest income on a tax equivalent basis for the three months ended June 30, 2008 and 2007 was $11.2 million and $10.3 million, respectively.  For the six months ended June 30, 2008 and 2007, net interest income on a tax equivalent basis was $21.6 million and $20.3 million, respectively.

 

Our net interest margin, which equals net interest income divided by average earning assets, was 2.85% and 2.64% for the three months ended June 30, 2008 and 2007, respectively.  For the year to date June 30, 2008 and 2007, our net interest margin was 2.77% and 2.62%, respectively.  The increase in the net interest margin for the three and six months ended June 30, 2008 compared to the same periods of 2007 is a result of a greater decrease in the cost of interest-bearing liabilities than the decrease in yields earned for average earning assets.  Tables 2 through 5 present an analysis of average earning assets and interest-bearing liabilities with related components of interest income and interest expense on a tax equivalent basis.

 

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Table of Contents

 

Table 2.

 

This excerpt taken from the CFNL 10-Q filed May 12, 2008.

Net Interest Income

 

Net interest income represents the difference between interest and fees earned on interest -earning assets and the interest paid on deposits and other interest-bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates. Net interest income for the three months ended March 31, 2008 and 2007 was $10.3 million and $9.8 million, respectively, a period-to-period increase of $500,000, or 5%. The increase in net interest income is primarily the result of a greater decrease in our cost of interest-bearing liabilities than our decrease in the yields earned for average earning assets.  We have certain loans and investment securities for which a portion of the income realized is tax-exempt.  Net interest income on a tax equivalent basis for the three months ended March 31, 2008 and 2007 was $10.4 million and $9.9 million, respectively. 

 

Our net interest margin, which equals net interest income divided by average earning assets, was 2.69% and 2.60%, respectively, for the three months ended March 31, 2008 and 2007. The increase in the net interest margin for the three months ended March 31, 2008 compared to the same period of 2007 is a result of a greater decrease in the cost of interest-bearing liabilities than the decrease in yields earned for average earning assets.  Tables 1 and 2 present an analysis of average earning assets and interest-bearing liabilities with related components of interest income and interest expense on a tax equivalent basis.

 

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This excerpt taken from the CFNL 10-Q filed Nov 8, 2007.

Net Interest Income

 

Net interest income represents the difference between interest and fees earned on interest -earning assets and the interest paid on deposits and other interest-bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates. Net interest income for the three months ended September 30, 2007 and 2006 was $10.3 million and $10.4 million, respectively, a period-to-period decrease of $87,000, or 0.8%. Net interest income for the nine months ended September 30, 2007 and 2006 was $30.4 million and $31.5 million, respectively.  The decrease in net interest income is primarily the result of a greater increase in our cost of interest-bearing liabilities than our increase in the yields earned for average earning assets.  We have certain loans and investment securities for which a portion of the income realized is tax-exempt.  Net interest income on a tax equivalent basis for the three months ended September 30, 2007 and 2006 was $10.4 million and $10.5 million, respectively.  For the nine months ended September 30, 2007 and 2006, net interest income on a tax equivalent basis was $30.7 million and $31.6 million, respectively.

 

Our net interest margin, which equals net interest income divided by average earning assets, was 2.65% and 2.93%, respectively, for the three months ended September 30, 2007 and 2006. For the nine months ended September 30, 2007 and 2006, our net interest margin was 2.63% and 3.05%, respectively.  The decrease in the net interest margin for the three and nine months ended September 30, 2007 compared to the same periods of 2006 is a result of the higher increase in the cost of interest-bearing liabilities than the increase in yields earned for average earning assets.  Tables 2 through 5 present an analysis of average earning assets and interest-bearing liabilities with related components of interest income and interest expense on a tax equivalent basis.

 

Table 2.

 

This excerpt taken from the CFNL 10-Q filed Aug 9, 2007.

Net Interest Income

Net interest income represents the difference between interest and fees earned on interest-earning assets and the interest paid on deposits and other interest-bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates. Net interest income for the three months ended June 30, 2007 and 2006 was $10.2 million and $10.7 million, respectively, a period-to-period decrease of $479,000, or 4%. Net interest income for the six months ended June 30, 2007 and 2006 was $20.1 million and $21.1 million, respectively.  The decrease in net interest income is primarily the result of the current interest margin pressure resulting from longer term treasury yields being below the fed funds targeted rate which is causing a greater increase in our cost of interest-bearing liabilities than our increase in the yields earned for average earning assets.  Net interest income on a tax equivalent basis for the three months ended June 30, 2007 and 2006 was $10.3 million and $10.8 million, respectively.  For the six months ended June 30, 2007 and 2006, net interest income on a tax equivalent basis was $20.3 million and $21.2 million, respectively.

Our net interest margin, which equals net interest income divided by average earning assets, was 2.64% and 3.10%, respectively, for the three months ended June 30, 2007 and 2006. For the six months ended June 30, 2007 and 2006, our net interest margin was 2.62% and 3.13%, respectively.  The decrease in the net interest margin for the three and six months ended June 30, 2007 compared to the same period of 2006 is a result of the higher increase in the cost of interest-bearing liabilities than the increase in yields earned for average earning assets.  Tables 1 through 4 present an analysis of average earning assets and interest-bearing liabilities with related components of interest income and interest expense on a tax equivalent basis.

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This excerpt taken from the CFNL 10-Q filed May 9, 2007.

Net Interest Income

Net interest income represents the difference between interest and fees earned on interest-earning assets and the interest paid on deposits and other interest-bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates. Net interest income for the three months ended March 31, 2007 and 2006 was $9.8 million and $10.4 million, respectively, a period-to-period decrease of $560,000, or 5%. The decrease in net interest income is primarily the result of the current interest margin pressure resulting from the inverted yield curve which is causing a higher increase in our cost of interest-bearing liabilities than our increase in the yields earned for average earning assets.  Net interest income on a tax equivalent basis for the three months ended March 31, 2007 and 2006 was $9.9 million and $10.4 million, respectively.

Our net interest margin, which equals net interest income divided by average earning assets, was 2.60% and 3.16%, respectively, for the three months ended March 31, 2007 and 2006. The decrease in the net interest margin for the three months ended March 31, 2007 compared to the same period of 2006 is a result of a higher increase in the cost of interest-bearing liabilities

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than the increase in yields earned for average earning assets.  Tables 1 and 2 present an analysis of average earning assets and interest-bearing liabilities with related components of interest income and interest expense on a tax equivalent basis.

This excerpt taken from the CFNL 10-Q filed Nov 8, 2006.

Net Interest Income

Net interest income represents the difference between interest and fees earned on interest earning assets and the interest paid on deposits and other interest bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates. Net interest income for the three months ended September 30, 2006 and 2005 was $10.4 million and $10.1 million, respectively, a period-to-period increase of $309,000, or 3%. The increase in net interest income is primarily the result of an increase in the average volume of loans receivable and investment securities compared with the same period of 2005. These increases were funded through increases in total deposits and other borrowed funds. Net interest income for the three months ended September 30, 2006 and 2005 represented 68% and 58% of our total revenues, respectively.

Net interest income for the nine months ended September 30, 2006 and 2005 was $31.5 million and $27.1 million, respectively, a period-to-period increase of $4.5 million, or 17%. The increase in net interest income is primarily the result of an increase in the average volume of loans receivable and investment securities compared with the same period of 2005. These increases were funded through increases in total deposits and other borrowed funds. Net interest income for the nine months ended September 30, 2006 and 2005 represented 67% and 59% of our total revenues, respectively.

Our net interest margin, which equals net interest income divided by average earning assets, for the three months ended September 30, 2006 and 2005 was 2.93% and 2.92%, respectively. Our net interest margin for the nine months ended September 30, 2006 and 2005

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was 3.05% and 2.89%, respectively. The increase in the net interest margin for the three and nine months ended September 30, 2006 compared to the same periods of 2005 is a result of a higher volume of loans receivable and investment securities and an increased rate of interest earned on those earning assets compared with the interest rate paid on the increased volume of deposits and other borrowed funds. Tables 2 through 5 present an analysis of average earning assets and interest bearing liabilities with related components of interest income and interest expense.

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