- The followings are recent balance sheet accounts for Prime National Bank. Assets: Cash assets: $17 m. Loans secured by real estate: $40 m. Commercial loans: $45 m. Government securities owned $16 m. Goodwill: $5 m. Bank fixed assets: $15 m. Total assets: $138 million Liabilities: Demand deposits: $50 m. Time & savings deposits: $66m. Federal funds purchased: $15 m. Trust-preferred securities: $2m. Owners capital: $5m. Total liabilities and owners capital: $138 m. Note: The bank has loan-loss reserves of $10 million

a.Calculate the Tier 1 Ratio based on the information provided and the risk-adjusted assets estimate from Part b.?

b. Calculate the Total Capital Ratio based on the information provided and the risk-adjusted assets estimate from Part b. (Total capital = Tier 1 plus Tier 2.)

c. What actions could the bank management team take to improve the banks Tier 1 and Total Capital ratios?