This problem focuses on bank capital

management and various capital ratio measures. Following are

recent balance sheet accounts for Prime First National Bank.

Cash assets $ 17 million

Loans secured by real estate 40

Commercial loans 45

Government securities owned 16

Goodwill 5

Bank fixed assets 15

Total assets $138 million

Demand deposits $50 million

Time & savings deposits 66

Federal funds purchased 15

Trust-preferred securities 2

Owners' capital 5

Total liabilities and owners'capital $138 million

All amounts are in millions of dollars.

Note: The bank has loan-loss reserves of $10 million. The real estate

and commercial loans shown on the balance sheet are net of the

loan-loss reserves.

c. Calculate the Tier 1 Ratio based on the information provided

and the risk-adjusted assets estimate from Part b.

d. Calculate the Total Capital (Tier 1 plus Tier 2) Ratio based on

the information provided and the risk-adjusted assets estimate

from Part b.