Question: Suppose you have been given the financial information below for a commercial bank: Income taxes owed ...................$13 Noninterest revenues from service fees ........... 70 Interest
Suppose you have been given the financial information below for a commercial bank:
Income taxes owed ...................$13
Noninterest revenues from service fees ........... 70
Interest revenues from loans ..............129
Interest and dividends from investments and securities .... 26
Dividends paid to stockholders .............. 4
Interest paid to depositors ...............$64
Interest on non-deposit borrowings ............ 8
Salaries and wages of bank employees ........... 27
Overhead costs .................. 3
Loan-loss provision ................ 2
Securities gains (or losses) .............. 0
a. Calculate this bank's net interest income, net noninterest income, pretax net operating income, net income after taxes, undivided profits (or retained earnings), total revenues, and total expenses.
b. Suppose the above bank's return on assets – the ratio of its net income after taxes to total assets – is 0.85 percent. What is the total of the bank's assets in dollars?
c. Suppose this bank's return on stockholder's equity capital – the ratio of its net income after taxes to total equity capital – is 12 percent. What is the bank's total equity capital in dollars?
d. Suppose the above bank's total deposits equal 75 percent of its total liabilities. How many deposits in total dollar volume does the bank hold?
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