DEFINITION of 'Noninterest Expense'

Fixed operating costs that a financial institution must incur, such as anticipated bad debt provisions. Noninterest expenses can include employee salaries and benefits, equipment and property leases, taxes, loan loss provisions and professional service fees. Companies will offset noninterest expenses by generating revenue through noninterest income.

BREAKING DOWN 'Noninterest Expense'

Employee compensation (salaries and benefits) typically comprise the largest portion of an institution's noninterest expenses. Usually these expenses relate to activities that are not associated with targeting customers to deposit funds in the bank.

RELATED TERMS
  1. General Provisions

    A balance sheet item representing funds set aside by a company ...
  2. Held By Production

    A provision in an oil or natural gas property lease that allows ...
  3. Loan Loss Provision

    An expense set aside as an allowance for bad loans (customer ...
  4. Operating Expense

    A category of expenditure that a business incurs as a result ...
  5. Wage Expense

    In financial accounting, wage expense represents payments made ...
  6. Noncredit Services

    Fee-based services that do not involve the extension of credit ...
Related Articles
  1. Investing

    Banks Helped By Lower Loan Loss Provisions

    Many banks saw improved credit quality in the first quarter of 2011 leading to lower loan loss provisions.
  2. Personal Finance

    What is a Loan Loss Provision?

    Banks set aside loan loss provisions to cover losses from bad loans.
  3. Investing

    How Negative Interest Rates Can Affect Banks' Bottom Lines

    Examine the impacts of low interest rates on banking industry profits and find out if negative interest rates will have a more extreme effect.
  4. Investing

    Capital One Stock Falls on Fourth Quarter Miss

    The credit card issuer reported fourth quarter results that missed Wall Street's profit expectations, despite a rise in revenue.
  5. Small Business

    What are Operating Expenses?

    An operating expense is any expenditure made for the purpose of operating a business. These expenses are the day-to-day costs that help keep the business going. Operating expenses are reflected ...
  6. Investing

    Commerce Bancshares Q2 Earnings Beat, Rev Miss (CBSH)

    The community bank reported mixed second quarter results, resulting in a beat on the bottom line, but a miss on the top line.
  7. Investing

    Have Big Banks Turned A Corner?

    Five out of the top six banks in the United States reported an increase in profits this earnings season. Does this mean that big banks stocks are out of the woods?
  8. Investing

    Analyzing A Bank's Financial Statements

    A careful review of a bank's financial statements can help you identify key factors in a potential investment.
RELATED FAQS
  1. What's the difference between accrued expenses and provisions?

    Read about the differences between accrued expenses and provisions, and why a company might record one over the other in ... Read Answer >>
  2. What is the difference between capital and operating expenses?

    Learn about the types of expenses that a company incurs. Understand the difference between capital and operating expenses, ... Read Answer >>
  3. What is the difference between an operational expense and an administrative expense?

    An operating expense covers the production and marketing of products and services, whereas an administrative expense covers ... Read Answer >>
  4. What are the different types of operating expenses?

    Learn about the different types of operating expenses and how they impact companies. Some are fixed costs while others are ... Read Answer >>
  5. What are the differences between gains & losses and revenue & expenses?

    Learn how to distinguish between gains, losses, revenues and expenses. Take a look at how accountants record each category ... Read Answer >>
Hot Definitions
  1. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  2. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  5. Zero Day Attack

    Zero Day Attack is an attack that exploits a potentially serious software security weakness that the vendor or developer ...
  6. Effective Tax Rate

    The average rate at which an individual or corporation is taxed. The effective tax rate for individuals is the average rate ...
Trading Center