Profits and Balance Sheet Developments at U.S. Commercial Banks in 2006
Figure 18. Net interest margin, by size of bank, 1990-2006. Data plotted as curves. Two panels. In the top panel, the margin for all banks begins in 1990 at about 3.9 percent, rises to a peak of about 4.3 percent in 1992, declines to about 3.9 percent in 2000, rises to about 4 percent in 2002, and then declines to a bit below 3.5 percent in 2006. In the bottom panel, the margin for the 10 largest banks begins in 1990 at about 3 percent, rises to about 3.7 percent in 1994, declines to about 3.3 percent in 1997, rises on balance to about 3.8 percent in 2002, and then falls to a bit below 3 percent in 2006. The margin for large banks begins in 1990 at about 3.6 percent, rises to about 4.3 percent by 1992, remains about steady around that level through 1996, declines from a level of 4.4 percent in 1997 to about 3.8 percent by 2003, and stays around that level through 2006. The margin for medium-sized banks begins in 1990 at about 4.3 percent, rises to about 4.7 percent in 1993, stays at about that level through 1997, declines in two steps to about 4 percent by 2003, and then rises slightly to about 4.1 percent in 2005 and remains there in 2006. The margin for small banks begins in 1990 at about 4.4 percent, rises to about 4.7 percent in 1992, holds at about that level through 1997, declines to about 4.2 percent in 2003, and then rises slightly to about 4.3 percent by 2005 and remains there in 2006.
NOTE: The data are annual. Net interest margin is net interest income divided by average interest-earning assets. For definition of bank size, refer to the general note on the first page of the main text.