Sigma Bank has the following balance sheet in millions of dollars.

ASSETS		LIABILITIES
Current assets		Current liabilities
Cash	$21	Repo Agreements		$265
Petty cash	0.0001	Commercial Paper		35.9
Marketable Securities	8	Wages payable		8.5
Long-Term corp. bonds	40.5	Interest payable		2.9
Residential Mortgages	31	Taxes payable		4.1
Commercial mortgages	3.8	Federal Funds Loans		1.1
Prepaid insurance	1.5	Unearned revenues		1.5
Total current assets	106	Accrued income		2.0
		Total current liabilities		321
- Investments		Long-term liabilities
Sovereign bonds	10	Senior Comm. Note payable		110
Loans to foreign banks	11	Senior Notes payable		236
Other investments	9	Subordinate Notes Payable		19
Total Investment	30	Perpetual Debt		20
		Convertible Notes		5
		Total Long-term Liabilities		390
Property, plant & equipment Land	5.5	STOCKHOLDERS' EQUITY
Land improvements	6.5	Common stock		70
Buildings	169	Retained earnings		19
Equipment	201	Minority interest in subsidiaries		5
Less: accum. depreciation	-56	Perpetual preferred stock (Qualified)		9
Prop, plant & equip - net	326	Intermediate Preferred stock		6
-		Less: treasury stock		-50
Intangible assets		Total stockholders' equity		59
Goodwill	21
Trade names	284
Total intangible assets	305
Other assets	3
- Total assets	$770	Total liab. & ' equity		$770

Balance Sheet Notes:

Note on hybrid securities

Basel III provides guidelines for the type and amount of hybrid securities to be used in Teir I capital. For the purposes of this assignment, you can assume that Intermediate preferred stock is included but convertible debt is not.

Note on Treasury stock

CET1 Capital is calculated net of treasury stock. That is common stock less treasury stock

Note on accumulated depreciation

In the calculation of risk-adjusted assets, the value of fixed assets such as buildings, land, equipment, etc. is taken net of accumulated depreciation.

Note on Marketable Securities

Marketable securities can be treated like cash

Notes on assets held:

$10M of residential mortgages are category 2 with LTV greater than 90%

The rest of residential mortgages are category 1 with LTV between 60% and 80%

Note on Prepaid insurance

Pre-paid insurance can be treated like cash

Note on Commercial Mortgage

The bank is restricted to lending only to corporations with an S&P credit rating of AA or better

Note on Sovereign Debt

50% of sovereign debt has a CRC rating or 2 the rest has a CRC rating of 3

Note on foreign bank debt

Foreign bank loans are all made to banks in countries with CRC rating of 4

Off Balance Sheet Items

Off balance Sheet contingent guarantee contracts

$40 million Direct-credit substitute standby letters of credit issued to a BBB+ rated U.S. Corp.

$40 million commercial letters of credit issued to a BBB - -rated U.S. corporation

Off-balance sheet derivatives

$200 million 10-year interest rate swaps with a value of -50 mill to Sigma

$100 million 2-year forward /$ contracts with a value of 20 mill to Sigma

Questions: Calculate the banks:

a) Leverage ratio