Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on...

 

Transcribed Image Text:

Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. Balance Sheet (in thousands) Assets Cash and due from banks Rate Earned (%) $ 6,000 0 Investment securities Repurchase agreements Loans less allowance for losses 22,000 8 12,000 6 80,000 10 Fixed assets Other earning assets 10,000 0 4,000 9 Total assets $134,000 Liabilities and Equity Rate Paid (%) Demand deposits $ 9,000 0 NOW accounts Retail CDs Subordinated debentures 69,000 18,000 14,000 5 7 8 Total liabilities Common stock 110,000 10,000 Paid-in capital surplus Retained earnings 3,000 11,000 $134,000 Total liabilities and equity If the bank earns $120,000 in noninterest income, incurs $80,000 in noninterest expenses, and pays $2,500,000 in taxes, what is its net income? Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. Balance Sheet (in thousands) Assets Cash and due from banks Rate Earned (%) $ 6,000 0 Investment securities Repurchase agreements Loans less allowance for losses 22,000 8 12,000 6 80,000 10 Fixed assets Other earning assets 10,000 0 4,000 9 Total assets $134,000 Liabilities and Equity Rate Paid (%) Demand deposits $ 9,000 0 NOW accounts Retail CDs Subordinated debentures 69,000 18,000 14,000 5 7 8 Total liabilities Common stock 110,000 10,000 Paid-in capital surplus Retained earnings 3,000 11,000 $134,000 Total liabilities and equity If the bank earns $120,000 in noninterest income, incurs $80,000 in noninterest expenses, and pays $2,500,000 in taxes, what is its net income?

Answer rating: 100% (QA)

To calculate the net income for Small ville Bank we need to determine the net interest income and th... View the full answer