Reserves Securities Loans Total Melvin's Bank - Initial Balance Sheet Assets Liabilities and Net Worth $10 Checking Deps $40 $20 Non-transaction deposits $50 $70 Net Worth/capital $10 $100 Total $100 Melvin's Bank - Income Statement Securities 4% ($20)=$0.80 Loans 8% ($70)=$5.60 Total Interest Income $6.40 Letters of Credit $3.00 Other fees $1.00 Total Non-interest Income $4.00 Total Income $10.40 Interest expense Savings accounts 4% ($50)=$2.00 Non-interest expense Salaries, etc. $7.00 Total Expense Profits $9.00 $1.40 Net income