1. Use the information listed below for Carter State Bank and calculate the bank's ROE and...

 

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1. Use the information listed below for Carter State Bank and calculate the bank's ROE and its three component ratios (Net profit margin, Asset utilization and equity multiplier.) Net income $17 million Total assets $1,546 million $294 million Total revenue Total equity capital $148 million 2. A bank which starts with ALLL (used to be abbreviated as ALL) of $11.25 million at the beginning of the year. The charge for provision for loan losses for the year was $4.10 million. The bank charged off worthless loans of $4.76 million during the year and recovered $6.5 million on loans previously charged off. What is the end-of-the year balance for ALLL? (Show work, please.) 3. 4 bank currently owns a municipal bond paying a tax-exempt rate of 2.9%. The banks earned $5.1 million tax-exempt income from this bond. If the banks marginal tax rate is 32%, what is the taxable equivalent income in dollars? What is the tax benefit? Incomplete financial statements of M Street Bank are given below. $ In millions Balance Sheet Cash Securities Investments. Net Loans Net Premises and Equip. Total Assets Deposits Non-deposit Borrowings Equity Capital Total Liabilities and Equity Earning assets Interest bearing liabilities. S60 Interest Income $145 Interest Expenses S921 Net interest income $27 Income Statement Non-interest Income $907 Non-interest Expenses $121 ********** $861 Provision for Loan Losses Pre Tax Net Operating Income Securities Gains (Losses) Taxes Net Income a. Please complete the missing items in the balance-sheet and the income statement. $54.0 $23.4 $5.2 $14.6 $3.1 -$1.9 $4.1 b. Calculate the following ratios: ROE, ROA, Net interest margin, Net profit margin, Earnings spread, Equity multiplier, and Asset Utilization. You may assume that the balance sheet mumbers are averages for two periods. Write the extended Du Pont equation for the bank (actual numbers, not the formulas). 1. Use the information listed below for Carter State Bank and calculate the bank's ROE and its three component ratios (Net profit margin, Asset utilization and equity multiplier.) Net income $17 million Total assets $1,546 million $294 million Total revenue Total equity capital $148 million 2. A bank which starts with ALLL (used to be abbreviated as ALL) of $11.25 million at the beginning of the year. The charge for provision for loan losses for the year was $4.10 million. The bank charged off worthless loans of $4.76 million during the year and recovered $6.5 million on loans previously charged off. What is the end-of-the year balance for ALLL? (Show work, please.) 3. 4 bank currently owns a municipal bond paying a tax-exempt rate of 2.9%. The banks earned $5.1 million tax-exempt income from this bond. If the banks marginal tax rate is 32%, what is the taxable equivalent income in dollars? What is the tax benefit? Incomplete financial statements of M Street Bank are given below. $ In millions Balance Sheet Cash Securities Investments. Net Loans Net Premises and Equip. Total Assets Deposits Non-deposit Borrowings Equity Capital Total Liabilities and Equity Earning assets Interest bearing liabilities. S60 Interest Income $145 Interest Expenses S921 Net interest income $27 Income Statement Non-interest Income $907 Non-interest Expenses $121 ********** $861 Provision for Loan Losses Pre Tax Net Operating Income Securities Gains (Losses) Taxes Net Income a. Please complete the missing items in the balance-sheet and the income statement. $54.0 $23.4 $5.2 $14.6 $3.1 -$1.9 $4.1 b. Calculate the following ratios: ROE, ROA, Net interest margin, Net profit margin, Earnings spread, Equity multiplier, and Asset Utilization. You may assume that the balance sheet mumbers are averages for two periods. Write the extended Du Pont equation for the bank (actual numbers, not the formulas).

Answer rating: 100% (QA)

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