Waterman Bank: Net Interest Margin Analysis
As of 2Q26, from Call Report Schedules RI and RC-K.
In 2Q26, earning assets yielded 7.25% and interest expense came to 2.68% of earning assets, leaving a net interest margin of 4.58%. Interest-bearing liabilities cost 3.06%, a spread of 4.20%; the other 0.38% of margin comes from the $19.4M of earning assets funded by deposits and equity that pay no interest. The published margin on our bank pages, 4.58%, agrees within a basis point.
Where the margin comes from, 2Q26
Each earning asset's average balance for the quarter, the interest it earned, its annualized yield, and the share of the margin it supplies: its interest times four over average earning assets of $157.4M. The contributions add up to the yield on earning assets.
| Earning asset | Average balance | Share | Interest | Yield | Contribution | Source |
|---|---|---|---|---|---|---|
| Loans and leases | $109.8M | 69.75% | $2.4M | 8.89% | 6.20% | RCON3360, RCON3484, RIAD4010, RIAD4065 |
| U.S. Treasury and agency securities | $8.1M | 5.15% | $78K | 3.85% | 0.20% | RCONB558, RIADB488 |
| Mortgage-backed securities | $1.1M | 0.71% | $7K | 2.52% | 0.02% | RCONB559, RIADB489 |
| All other securities | $1.5M | 0.93% | $17K | 4.65% | 0.04% | RCONB560, RIAD4060 |
| Interest-bearing balances at banks | $36.9M | 23.46% | $312K | 3.38% | 0.79% | RCON3381, RIAD4115 |
| Fed funds sold and reverse repos | $0 | 0.00% | $0 | NA | 0.00% | RCON3365, RIAD4020 |
| Other interest income | NA | NA | $0 | NA | 0.00% | RIAD4518 |
| Earning assets | $157.4M | 91.08% of assets | $2.9M | 7.25% | 7.25% | RIAD4107, ties |
What the funding costs
Each interest-bearing liability's average balance, interest and annualized cost, and the margin it takes away: its interest times four over average earning assets.
| Funding | Average balance | Share | Interest | Cost | Takes from margin | Source |
|---|---|---|---|---|---|---|
| Interest-bearing transaction accounts | $16.6M | 12.04% | $19K | 0.46% | -0.05% | RCON3485, RIAD4508 |
| Savings and money market deposits | $90.5M | 65.63% | $781K | 3.45% | -1.99% | RCONB563, RIAD0093 |
| Time deposits of $250,000 or less | $18.8M | 13.62% | $163K | 3.47% | -0.41% | RCONHK16, RIADHK03 |
| Time deposits over $250,000 | $10.3M | 7.45% | $91K | 3.54% | -0.23% | RCONHK17, RIADHK04 |
| Fed funds purchased and repos | $0 | 0.00% | $0 | NA | 0.00% | RCON3353, RIAD4180 |
| Other borrowed money | $1.7M | 1.27% | NA | NA | NA | RCON3355 |
| Interest-bearing liabilities | $137.9M | $1.1M | 3.06% | -2.68% | RIAD4073, ties |
The margin, line by line
| Yield on earning assets | 7.25% | interest income x 4 / average earning assets |
|---|---|---|
| Less: interest expense on earning assets | 2.68% | interest expense x 4 / average earning assets |
| Net interest margin | 4.58% | net interest income $1.8M x 4 / $157.4M |
| Of which: spread (yield less cost of interest-bearing liabilities) | 4.20% | 7.25% less 3.06% |
| Of which: funds that cost nothing | 0.38% | margin less spread |
| Cost of interest-bearing deposits | 3.10% | deposit interest x 4 / average interest-bearing deposits |
Interest for the quarter is the year-to-date figure on Schedule RI less the prior quarter's; balances are the quarterly averages on Schedule RC-K. Amounts are filed thousands shown in dollars. The lines above add up to total interest income, total interest expense and net interest income as filed.
What moved the margin, 2Q25 to 2Q26
Net interest income changed by +$155K a quarter: +$267K from balances growing or shrinking, -$112K from yields and costs moving. The margin moved +3 bp.
| Line | Change in net interest income | From volume | From rate | Rate moved | Margin effect |
|---|---|---|---|---|---|
| Loans and leases | +$328K | +$390K | -$62K | -22 bp | +37 bp |
| U.S. Treasury and agency securities | +$4K | +$12K | -$8K | -41 bp | -1 bp |
| Mortgage-backed securities | -$3K | -$3K | -$210 | -8 bp | -1 bp |
| All other securities | +$1K | +$200 | +$800 | +22 bp | -0 bp |
| Interest-bearing balances at banks | -$192K | -$64K | -$128K | -139 bp | -60 bp |
| Fed funds sold and reverse repos | +$0 | NA | NA | NA | +0 bp |
| Other interest income | +$0 | NA | NA | NA | +0 bp |
| Interest-bearing transaction accounts | -$3K | -$40 | -$3K | +7 bp | -0 bp |
| Savings and money market deposits | -$40K | -$75K | +$35K | -16 bp | +6 bp |
| Time deposits of $250,000 or less | +$80K | +$49K | +$31K | -65 bp | +26 bp |
| Time deposits over $250,000 | -$20K | -$43K | +$23K | -89 bp | -4 bp |
| Fed funds purchased and repos | +$0 | NA | NA | NA | +0 bp |
| Other borrowed money | NA | NA | NA | NA | NA |
| Net interest income | +$155K | +$267K | -$112K | +3 bp |
Funding lines are shown by their effect on net interest income, so a rise in deposit interest is negative. Volume is the change in balance at the earlier quarter's rate; rate is the rest, so the two add to the change. The margin effect is the change in each line's contribution, and the effects add to the change in the margin.
Yields and costs by filed quarter
| Measure | 2Q26 | 1Q26 | 4Q25 | 3Q25 | 2Q25 | 1Q25 |
|---|---|---|---|---|---|---|
| Net interest margin | 4.58% | 4.77% | 5.23% | 4.98% | 4.54% | 4.86% |
| Yield on earning assets | 7.25% | 7.48% | 8.08% | 7.91% | 7.50% | 7.61% |
| Yield on loans and leases | 8.89% | 9.63% | 9.91% | 9.73% | 9.12% | 9.71% |
| Yield on securities | 3.82% | 3.87% | 3.99% | 4.10% | 4.03% | 3.98% |
| Cost of interest-bearing deposits | 3.10% | 3.06% | 3.12% | 3.35% | 3.33% | 3.24% |
| Cost of interest-bearing liabilities | 3.06% | 3.02% | 3.08% | 3.30% | 3.28% | 3.18% |
| Interest expense to earning assets | 2.68% | 2.71% | 2.84% | 2.92% | 2.96% | 2.75% |
| Net interest spread | 4.20% | 4.46% | 5.00% | 4.61% | 4.22% | 4.42% |
| Benefit of funds that cost nothing | 0.38% | 0.30% | 0.24% | 0.38% | 0.32% | 0.44% |
12 quarters against the asset-tier median
| Quarter | NIM | Earning asset yield | Loan yield | Securities yield | Tier median NIM | Tier median Earning asset yield |
|---|---|---|---|---|---|---|
| 2Q26 | 4.58% | 7.25% | 8.89% | 3.95% | 3.95% | 5.60% |
| 1Q26 | 4.77% | 7.48% | 9.63% | 3.99% | 3.84% | 5.49% |
| 4Q25 | 5.24% | 8.08% | 9.91% | 4.13% | 3.89% | 5.63% |
| 3Q25 | 4.99% | 7.91% | 9.73% | 4.24% | 3.82% | 5.63% |
| 2Q25 | 4.55% | 7.50% | 9.12% | 4.17% | 3.73% | 5.53% |
| 1Q25 | 4.86% | 7.61% | 9.71% | 4.13% | 3.55% | 5.37% |
| 4Q24 | 5.14% | 7.82% | 9.24% | 4.27% | 3.53% | 5.47% |
| 3Q24 | 5.23% | 7.83% | 8.98% | 4.54% | 3.45% | 5.44% |
| 2Q24 | 5.43% | 8.02% | 9.51% | 4.52% | 3.39% | 5.30% |
| 1Q24 | 5.10% | 7.55% | 8.90% | 4.42% | 3.30% | 5.14% |
| 4Q23 | 7.52% | 9.97% | 9.85% | 12.62% | 3.38% | 5.09% |
| 3Q23 | 4.87% | 6.88% | 9.23% | 1.53% | 3.40% | 4.89% |
These are the published figures on our bank pages, reported to two decimals. NA means not available for that quarter. Tier medians are the served benchmark for banks in the same asset tier.
Against similar banks, 2Q26
| Bank | Assets | NIM | Earning asset yield | Loan yield | Securities yield | IB deposit cost | IB liability cost | Interest expense / EA |
|---|---|---|---|---|---|---|---|---|
| Waterman Bank (this bank) | 4.58% | 7.25% | 8.89% | 3.82% | 3.10% | 3.06% | 2.68% | |
| The Community Bank | $173.5M | 3.76% | 5.05% | 7.12% | 2.56% | 1.96% | 1.96% | 1.29% |
| The First National Bank of Scott City | $173.8M | 4.46% | 5.91% | 6.96% | 2.47% | 2.11% | 2.06% | 1.38% |
| The Goose River Bank | $173.4M | 4.33% | 5.78% | 6.54% | 2.69% | 1.98% | 1.90% | 1.33% |
| Baybank | $173.4M | 4.83% | 6.61% | 7.62% | 1.80% | 2.01% | 1.87% | 1.56% |
| The Warrington Bank | $173.9M | 3.06% | 3.58% | 5.38% | 2.65% | 0.84% | 0.84% | 0.51% |
| Dewitt Savings Bank | $173.2M | 3.07% | 5.12% | 6.39% | 3.66% | 2.59% | 2.49% | 2.03% |
| Twin River Bank | $173.0M | 5.38% | 6.66% | 8.11% | 1.35% | 1.88% | 1.88% | 1.28% |
| First National Bank of Hartford | $173.0M | 4.62% | 6.17% | 8.23% | 2.58% | 1.96% | 1.96% | 1.55% |
| Citizens Bank and Trust of Lebanon, Inc. | $173.0M | 2.91% | 4.66% | 7.37% | 3.34% | 2.22% | 2.16% | 1.68% |
| First State Bank | $174.3M | 4.02% | 5.16% | 8.45% | 3.42% | 2.33% | 2.33% | 1.14% |
| Peer 25th percentile | 3.24% | 5.07% | 6.65% | 2.49% | 1.96% | 1.89% | 1.28% | |
| Peer median | 4.17% | 5.47% | 7.24% | 2.61% | 1.99% | 1.96% | 1.35% | |
| Peer 75th percentile | 4.58% | 6.10% | 7.99% | 3.18% | 2.19% | 2.14% | 1.56% | |
| This bank's percentile | 70 | 100 | 100 | 100 | 100 | 100 | 100 |
Every bank in this table, this one included, is measured the same way from its own Schedules RI and RC-K for 2Q26. The percentile places this bank in the peer range, 0 the lowest and 100 the highest; for a cost, lower is better. Similar banks are the nearest banks by size in the same asset tier.
Source: FFIEC Call Report Schedule RI (income statement) and Schedule RC-K (quarterly averages), as filed. Rates are annualized as the quarter times four and are not adjusted for tax-exempt income. The same figures are in the API at /api/v1/banks/604640/margin-analysis/ and in the Excel workbook. Next: the yields tab, the income tab, the deposits tab, the peer analysis, or the full profile.