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.