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    Chapter 6 - Ex12

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    kmalhotra0510

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    Chapter 6 - Ex12

    Uploaded by

    kmalhotra0510
    12 views2 pages

    Original Title

    Chapter 6_ Ex12

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    12 views2 pages

    Chapter 6 - Ex12

    Uploaded by

    kmalhotra0510

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Ex12.

    The latest report of condition and income and expense statement for Smiling Merchants
    National Bank are as shown in the following tables:

    Smiling Merchants National Bank (complete)


    Income and Expense Statement (Report of Income)
    Interest and fees on loans $50
    Interest and dividends on securities 6
    Total interest income 56

    Interest paid on deposits 40


    Interest on nondeposit borrowings 6
    Total interest expense 46

    Net interest income 10


    Provision for loan losses 5
    Noninterest income and fees 20
    Noninterest expenses:
    Salaries and employee benefits 10
    Overhead expenses 5
    Other noninterest expenses 2
    Total noninterest expenses 17
    Net noninterest income -2

    Pretax operating income 8


    Securities gains (or losses) 2
    Pretax net operating income 10
    Taxes 2
    Net operating income 8
    Net extraordinary income -1
    Net income 7
    *Note: the bank currently has 40 FTE employees.

    Smiling Merchants National Bank


    Report of Condition
    Assets Liabilities
    Cash and deposits due from banks $100 Demand deposits $190
    Investment securities 150 Savings deposits 180
    Federal funds sold 10 Time deposits 470
    Net loans 700 Federal funds purchased 80
    (Allowance for loan losses = 25) Total liabilities 920
    (Unearned income on loans = 5) Equity capital
    Net Fixed Assets 50 Common stock 20
    Surplus 35
    Total assets 1010 Retained earnings 35
    Total Capital 90
    Total earnings assets 860 Interest-bearing deposits 650
    Using these statements, calculate the following performance measures:

    ROE Asset utilization


    ROA Equity multiplier
    Net interest margin Tax management efficiency
    Net noninterest margin Expense control efficiency
    Net operating margin Asset management efficiency
    Earnings spread Funds management efficiency
    Net profit margin Operating efficiency ratio

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