Profits and Balance Sheet Developments at U.S. Commercial Banks in 2007
Figure 19. Net interest margin, by size of bank, 1990-2007. 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, and then declines almost steadily over the next 15 years to about 3.4 percent in 2007. In the bottom panel, the margin for the 100 largest banks begins in 1990 at around 3.4 percent, rises to about 4 percent in 1992, and drifts down over the rest of the decade, reaching about 3.7 percent in 2000. After edging up in 2001 and 2002 to about 3.9 percent, it falls again between 2003 and 2007, to about 3.2 percent. The margin for medium-sized banks begins in 1990 at about 4.3 percent, rises to about 4.7 percent by 1993, and remains about steady around that level through 1996. It trends down from that level in 1997 to about 4.0 percent by 2003 and stays around that level through 2007. The margin for small banks begins in 1990 at about 4.4 percent, rises to about 4.7 percent in 1992, and holds at about that level through 1997. It declines to about 4.2 percent between 1997 and 2003, rises slightly to about 4.3 percent by 2006, and then falls to a bit under 4.1 percent by 2007.
Note: The data are annual. Net interest margin is net interest income divided by average interest-earning assets. For the definition of bank size, see the general note on the first page of the main text.