Michigan Independence Bank wants to analyze its interest rate sensitivity, classifying anything maturing in less than one year as rate sensitive. It has the balance sheet below.

Assets		Liabilities and Equity Capital
	$ Amount (MM)		$ Amount (MM)
Cash & Reserves	$50	Demand Deposits	$210
3 Month Treasury Bills	$175	NOW Accounts	$75
Federal Funds Lent	$155	3 Month Certificates of Deposit	$100
3 Year Treasury Securities	$70	6 Month Commercial Paper	$185
Short Term Business Loans	$200	Federal Funds Borrowed	$75
Long Term Construction Loans	$75	Long Term Fixed Rate Borrowings	$49
30 Year Fixed Rate Mortgages	$90
10 Year Floating Rate Mortgages	$150	Equity Capital & Retained Earnings	$171
Total Assets	$965	Total L +EC	$965

a) What (categories and total $ amount) are the Banks Rate Sensitive assets?

b) What (categories and total $ amount) are the Banks Rate Sensitive liabilities?

c) What is the banks Rate Sensitivity (or $) GAP? Be sure to include whether the $GAP is positive or negative.

d) If all interest rates on the two sides of balance sheet decline by .65% (.0065), when other things are equal:

i. Will the banks pre-tax income increase or decrease?

ii. What is the change in net interest income for Michigan Independence Bank over the year?