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Review the following information about First National Bank. Assets Amount Interest Rate of Return Securities $475 4.5% Loans 725 ALR? Non-earning 100 0.0% Total $1,300
Review the following information about First National Bank. Assets Amount Interest Rate of Return Securities $475 4.5% Loans 725 ALR? Non-earning 100 0.0% Total $1,300 Liabilities and Equity Amount Interest Cost Liabilities $1,175 3% Equity 125 Total $1,300 Target ROE = 12% Tax rate = 21% Net Non-interest Income = -$16 Provision for loan losses = $3 What would the average loan rate (ALR) have to be to hit the target 12% ROE
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