NB bank earns 1% on its assets and has a 20% tax rate. It earns 8% on loans, and 6% on investments. It pays 4% on-time deposits, and 3% on federal funds purchased. Demand deposits pay no interest.

Balance Sheet for NB (in $M)

Assets Liabilities & Equity

Cash and due from banks $20            Demand deposits                        $40

Investments                         200          Time deposits                              150

Loans                                    120         Federal funds purchased            120

Premises                                20          Equity                                            50

                                              360                                                             $360

1. Construct an Income Statement for NB bank (assume a 20% tax rate and zero loan loss provision).

2. With this information construct as many ratios of bank performance as you can with the data available.