Galloping Merchants National Bank is a merchant banking firm located in Chicago, IL, USA. The Banks management wanted to evaluate their financial performance by applying key financial ratios.

a-Using the latest report of condition and income and expense statement calculate

the following performance measures:

1. ROA
2. Net Interest Margin
3. Asset Utilization Ratio
4. Expense Ratio
5. Equity Multiplier

b-Interpret the results Vs. the following industry average ratios:

Industry Average

ROA = 1%

NIM = 3%

AU = 10.5%

ER = 2.5%

EM = 10 X

Galloping Merchants National Bank Report of Income "Amounts rounded to "000,000's" Interest Fees on Loans Interest Dividends on Securities Total Interest Income $70 17 87 Interest Paid on Deposits Interest on Nondeposit Borrowings Total Interest Expense 54 11 65 22 7 12 Net Interest Income Provision for Loan Losses Noninterest Income and Fees Noninterest Expenses: Salaries and Employee Benefits Overhead Expenses Other Noninterest Expenses Total Noninterest Expenses 10 7 4 21 Pre Tax Operating Income Securities Gains (or Losses) Pre Tax Net Operating Income Taxes Net Operating Income Net Extraordinary Income Net Income 6 4 10 1 9 -1 $8 Galloping Merchant National Bank Report of Condition Cash and Due From Banks Investment Securities Federal Funds Sold $175 $180 $470 $100 Demand Deposits $150 Savings Deposits $10 Time Deposits Federal Funds $670 Purchase $65 Surplus Retained Earnings Net Loans Plant and Equipment $60 $25 $35 Total Assets $995 Total Equity $110 Shares of common stock outstanding 500