A bank had the following balance sheet during 2017. Also shown are the interest rates:

Assets amount ($mm) rate, %

Business Loans 50 6

Corporate Bonds 25 5

Government Bonds 18 2.5

Cash 6

Real assets 2

Liabilities

Demand Deposits 36 0

Time Deposits 45 1.1

Inter-Bank Borrowing 15 1.25

Equity 5

Calculate Net Interest Margin for the year.

The bank also received $200,000 in non-interest (fee) income during the year, and paid $1.5mm in labor compensation and other expenses for the year. What was its ROE?

The bank is considering issuing enough equity to replace all its time deposits. If nothing else changes, what is the new NIM and the new ROE?