Research contextSee what supports this page, how current it is, and where comparable or historical context is available.
- Research date
- Sep 21, 2026Use the dated article and cited sources for the definition, examples, and stated limitations.
- Operating-model context
- 14 connected conceptsPart of the reviewed Bank Balance Sheet and Returns; issuer definitions remain distinct where disclosed.
- Company examples
- 1 reviewed companyRelationships reflect supported examples, not a normalized cross-company KPI ranking.
Bank interest rate spread measures the difference between the average yield on interest-earning assets and the average rate paid on interest-bearing liabilities.
Interest Rate Spread =
Yield on Interest-Earning Assets
- Rate on Interest-Bearing Liabilities
Spread versus NIM
Interest rate spread is not the same as Net Interest Margin.
NIM also reflects the benefit of noninterest-bearing funding and the balance-sheet relationship between earning assets and funding sources. A bank's NIM can therefore exceed its reported interest rate spread.
PNC reports interest rate spread separately from the impact of noninterest-bearing sources and from net interest margin.
Source:
Interest rate spread isolates asset and interest-bearing-liability pricing. NIM is the broader spread-profitability measure.
Part of the Bank Balance Sheet and Returns
Connect average loans and deposits, earning-asset yields, deposit pricing and mix, tangible common equity, shareholder returns, and early problem-asset signals to understand bank balance-sheet economics.
How the model fits together
- Average balance and spread engine: Average loans, deposits, and interest-earning assets align balance-sheet scale with the period that generated earnings. Asset and loan yields show gross pricing, while interest-bearing deposit rates, noninterest-bearing deposit mix, and interest rate spread show how funding composition and pricing affect the spread engine.
- Tangible capital and shareholder returns: Tangible common equity removes specified intangible assets from common equity, tangible book value expresses that capital per share, and ROTCE shows profitability relative to average tangible common equity under the issuer's reconciliation. Generic ROA and ROE remain owned by their existing canonical encyclopedia pages rather than duplicated here.
- Credit deterioration ladder: Criticized assets can identify elevated weakness before default, classified assets generally represent more severe adverse grades, and nonperforming assets capture loans and other assets that have reached nonperforming status. Issuer definitions and denominators differ, so the three measures form a diagnostic sequence rather than a standardized formula.
See It in Company Research
These companies are examples of how the concept is reported or discussed in public filings. Definitions can differ by issuer; these links open company research rather than a normalized metric comparison.
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