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Federal Reserve Bank of St. Louis
Central Banker
Trends in community banks' net interest margins
Gary S. Corner
Andrew P. Meyer
Abstract

Net interest margins are clearly under pressure at community banks, but this trend is not new. It is a product of a highly competitive banking industry and a direct result of today’s lower lending levels and abundant balance sheet liquidity. The net interest margin is the difference between interest income and interest expense. Interest income and interest expense fluctuated considerably through the business cycle, but the long-term trend indicates that asset yields are falling faster than deposit and other funding costs.


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Gary S. Corner & Andrew P. Meyer, "Trends in community banks' net interest margins" , Federal Reserve Bank of St. Louis, Central Banker, issue Summer, 2013.
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Keywords: Community banks ; Interest
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