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Understanding Financial Statements

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Financial statements show key indicators of profitability and risk associated with the various aspects of an opportunity. You can access Financial Statements by clicking the 'Financial Statements' tab on the upper right corner of the scenario. 

 

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Financial Statements 

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 Loans - Contains information about loans in the opportunity. If an opportunity has multiple loans, click the chevrons to the left of 'Loans' to expand the specific financial data for each individual loan.

Deposits - Contains information about deposits associated with an opportunity. Unlike opportunities, there is no option to breakdown the individual deposit types - the values represented are an aggregate of all deposit types associated with the opportunity. 

Other - Contains information about other accounts associated with an opportunity. Like deposits, the values represented are an aggregate of all other accounts associated with the opportunity.

All - Contains aggregated totals from the Loans, Deposits, and Other columns. 

 

Net Interest Income

(Figures annualized over the term of the loan)

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Interest Income - Click the Info icon (Information.png) to view the values used to calculate interest income.

  • Calculation for Loans: Raw Interest Income + Origination Fees + Origination Expenses + Cap/Floor Impact
  • Calculation for Deposits: (1 - [Float & Reserves]) x Average Balance x Funding Curve Transfer Rate*

    *Funding Curve Transfer Rate is calculated by looking at the 'Transfer Duration' in the Assumptions of the deposit product and then finding the transfer duration on your specified funding curve - the 'Funding Curve Transfer Rate' is the rate associated with the transfer duration month on your funding curve. For non-maturity deposits, this is a part of the Product definition. For Timed Deposits, this is set by the Term of the Timed Deposit.

Interest Expense - Cost of Funds (annualized over the term of the loan)

Net Interest Income - Calculation: Interest Income - Interest Expense

 

Pretax Income

(Figures annualized over the term of the loan)

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Non-Interest Expense - Click the Info icon (Information.png) to view the values used to calculate non-interest expense. 

  • Calculation: Annual Servicing Expense + Guarantee Expense + Participation Expense + Annual Fees + Unused Line of Credit (LOC) Fees

Loan Loss Reserves - The total loan loss provision of the loan. If you have Advanced Analytics enabled, you will be able to see the Loan Loss Provision for each month of the loan in the "Amortization" section. 

Other Income - This item only applies to the 'Other' column. It will always be $0 for Loans & Deposits. 

Pretax Income - Calculation: Net Interest Income - Non-Interest Expense - Loan Loss Reserves + Other Income

 

Net Income

(Figures annualized over the term of the loan)

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Taxes - Calculated when Federal and State tax rates (set at the Region Level) are applied to the annualized 'Pretax Income'.

Net Income - Calculation: Pretax Income - Taxes

 

Average Balance/Equity

(Figures annualized over the term of the loan)

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Average Balance - The average balance of loan or deposit. 

Average Equity - The amount of risk-based capital allocated to the loan. Both Average Regulatory Capital and Average Economic Capital are used to calculate this amount. The calculation chooses the higher of the two averages and then averages those figures. (Note: Economic capital is higher earlier on in an amortizing loan, but drops off pretty quickly while regulatory capital stays pretty high throughout whole amortization).

 

Average Regulatory/Economic Capital

(Figures annualized over the term of the loan)

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Avg (Average) Regulatory Capital - Calculated using the 'Minimum Capital Level' in the Risk Ratings at the Product level. 

Avg (Average) Economic Capital - Calculated using the 'Credit Capital' in the Risk Ratings at the Product level against net exposure and the net recovery rate of the collateral. 

 

Funding/Commitment

(Figures represent a the day the loans/deposits begin)

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Gross Funding - Total commitment of the loan at the origination of the opportunity.

Loan Net Funding - Total commitment of the loan at the origination of the opportunity minus any payoffs from previous loans from this relationship (if present). If a Line of Credit, the 'Initial Balance' is also factored into this amount.

Loan Net Commitment - Total commitment of the loan, minus any previous commitments made to this relationship (if present). 

 

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