TriState Capital continues to manage a highly asset-sensitive
balance sheet, as 84% of its loan portfolio and 58% of its securities portfolio were floating rate, at Sept.
Despite the asset-sensitive
nature of South African banks, we do not forecast that moderately rising interest rates will translate into gains, as increasing funding costs, low growth, and competition for quality credits will likely consume much of the additional margin," it said.
In fact, current concerns about low short-term rates as the source of low net interest income make sense only for asset-sensitive
banks because only then will an increase in short-term market rates lead to an increase in net interest income.
results in Bank of Hawaii being asset-sensitive
despite its large
Third quarter 2010 earnings reflect a modest increase in the net interest margin despite pressure associated with the historically low interest rate environment and the company's asset-sensitive
balance sheet, and an increase in the provision for loan losses.
Our balance sheet continues to be asset-sensitive
, that is, we currently expect net interest income to increase should interest rates rise.
The impact of the asset-sensitive
balance sheet is reflected in the 2008 year-to-date decline in loan yield of 92 basis points compared to a 55 basis point decline in average cost of deposits.
Our second quarter performance reflects continued growth in our core commercial and home equity loan portfolios and deposits during a difficult economic environment, specifically as it relates to the current level of interest rates and our asset-sensitive
balance sheet,' said Philip R Sherringham, president and chief executive officer.
Our balance sheet is asset-sensitive
, so our loan yields have responded more rapidly to the Federal Reserve rate cuts than our cost of funds.
Compression in the net interest margin, which was affected by the substantial reductions in short-term interest rates the Federal Open Market Committee (FOMC) has made since September 2007, and by the company's asset-sensitive
interest rate risk position.
This decrease was driven by a decline in interest rates, which puts margin pressure on asset-sensitive
banks like NewDominion, and by an increased loan loss provision.
Alliance, like a majority of community banks these days, is asset-sensitive