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The following information is for Rainbow National Bank: Interest income Interest expense Total assets Security losses or gains $ 2,250.00 1,500.00 45,000.00 21.00 40,000.00
The following information is for Rainbow National Bank: Interest income Interest expense Total assets Security losses or gains $ 2,250.00 1,500.00 45,000.00 21.00 40,000.00 Earning assets Total liabilities Taxes paid 38,000.00 16.00 5,000 Shares of comon stock outstanding $ 800.00 Noninterest income 900.00 Noninterest expense 250.00 Provision for loan losses Please calculate: ROE ROA Net interest margin Earnings per share Net noninterest margin Net operating margin Alternative scenarios: 6 a. Suppose interest income, interest expenses, noninterest income, and noninterest expenses each increase by 3 percent while all other revenue and expense items shown in the preceding table remain unchanged. What will happen to Rainbow ROE, ROA, and earnings per share? b. On the other hand, suppose Rainbow interest income and expenses as well as its noninterest income and expenses decline by 3 percent, again with all other factors held constant. How would the bank's ROE, ROA, and per-share earnings change? Zahn C
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