demand/saving time ratio. The increase in 1988 was the result of a return to a more normal demand/sav ing time ratio, while the savings time deposit rate remained relatively stable.
Borrowing cost remained relatively stable over the five year period of analysis. The loan to deposit ratio increased steadily from 1986 onward, following a decline in 1985. At the same time, the primary capital to total assets ratio steadily increased across the five year period of analysis.
Employee costs increased steadily but slowly across the five year period of analysis. These increases were accompan ied, however, by steady and substantial increases in the net income to employee expense ratio.
Return on equity was uneven across the five year period of analysis. The return ranged from a low of 59.7 percent in 1984 to a high of 63.5 percent in 1987, with a mean return of 61.5 percent. Return on assets, however, increased sharply from 1986 to 1987, after remaining relatively stable during the 1984 1986 time period. Return on assets in 1988 was margin ally above the 1987 level. While some of the performance measures of the Sumitomo Bank of California are below American industry norms, very important measures exceed industry norms. These measures arerelated to profitability and risk. The future financial per formance of the Sumitomo Bank of California may be reason ably expected to continue to improve.
Common share market prices declined somewhat in 1988 from 1987 levels, following steady increases from 1984 to 1987. Each year since 1980, the Sumitomo Bank of California has paid a cash dividend of $1.16 per share plus a 7.5 percent of par value ($5.00) per share stock dividend. The total annual divi dent, thus, is valued at approximately $1.535 per share, which, based on the average market price in 1988, represents a 6.4 percent yield. Thus, while the stock is a safe investment, it is not a high yield investment. The desirabili...