BAF432 - BANK MANAGEMENT MIDTERM REVIEW II. EXERCISES Problem 1 Alpha Bank has recorded the following financial data for the past three years (dollars in millions): Calculate Net Interest Margin and Spread for three years and explain the figures. What could have been some possible reasons for this change? 2017 2018 2019 Interest revenues $66 $64 $62 Interest expenses 54 49 42 Loans (Excluding nonperforming) 450 448 446 Investments 346 320 290 Total deposits 460 450 444 Money market borrowings 224 213 180 Problem 2 Arrange the following items into an income statement. Label each item, place it in the appropriate category, and determine the bank's net income and the change (amount) in retained earnings. Item Amount in $ Interest paid on time deposits of under USD 100,000 20,000 Interest and fees on loans 130,000 Interest received on US Treasury and agency securities 155,000 Fees received on mortgage origination 15,000 Dividends paid to stockholders of USD 1 per share for 50,000 shares Interest paid on jumbo CDs 160,000 Provision from loan losses 25,000 Interest received on municipal bonds 50,000 Employee salaries and benefit 11,000 Service charge receipts from customer accounts 50,000 Taxes of 15% of taxable income are paid