Yield On Earning Assets

First things first: solvency. Solvency is a business’ ability to stay afloat. That means someone can keep their business running and meet long-term financial obligations like a big boy.

Yield on earning assets (YEA) is a type of solvency ratio used by banking regulators to judge banks. It compares the financial institution’s interest income to its earning assets. More specifically, it looks at total interest and dividend and fee income from loans and investments as a percentage of average earning assets.

In short, YEA helps regulators see how much cash a bank is raking in from their assets. Banks with a small asset base and sizable cash (yield) are seen as impressive and efficient. The cool kids.