The financial statements for BSW National Bank (BSWNB) are shown below: Balance
ID: 2655851 • Letter: T
Question
The financial statements for BSW National Bank (BSWNB) are shown below:
Balance Sheet BSW National Bank
Assets
Liabilities and Equity
Cash and due from banks
$ ?936
Demand deposits
$?5,040
Investments
3,100
Small time deposits
4,020
Federal funds sold
1,664
Jumbo CDs
4,680
Loans (less reserve for loan losses of 2,400)
9,120
Federal funds purchased
312
Premises
780
Equity
1,548
Total assets
$15,600
Total liabilities/equity
$15,600
Income Statement BSW National Bank
Interest income
$1,150
Interest expense
475
Provision for loan losses
150
Noninterest income
260
Noninterest expense
525
Taxes
60
a. What is the dollar value of earning assets held by BSWNB? (Please show work)
b. What is the dollar value of interest-bearing liabilities held by BSWNB? (Please show work)
c. What is BSWNB's total operating income? (Please show work)
d. Calculate BSWNB's asset utilization ratio. (Please show work)
e. Calculate BSWNB's net interest margin. (Please show work)
Assets
Liabilities and Equity
Cash and due from banks
$ ?936
Demand deposits
$?5,040
Investments
3,100
Small time deposits
4,020
Federal funds sold
1,664
Jumbo CDs
4,680
Loans (less reserve for loan losses of 2,400)
9,120
Federal funds purchased
312
Premises
780
Equity
1,548
Total assets
$15,600
Total liabilities/equity
$15,600
Explanation / Answer
a. What is the dollar value of earning assets held by BSWNB? (Please show work) Earning assets = Investment securities + Net Loans 3100+1664+9120 13884 $13,884 b. What is the dollar value of interest-bearing liabilities held by BSWNB? (Please show work) Interest- bearing Liabilities = Demand deposits+Small time deposits+Jumbo CDs+ Federal funds purchased 4020+4680+312 9012 $9,012 c. What is BSWNB's total operating income? (Please show work) Total Operating Income Interest Income $1,150 Interest Expense ($475) Provision for Loan losses ($150) Opearting income $525 d. Calculate BSWNB's asset utilization ratio. (Please show work) Asset utilization = (1150+260)/15600 9.04% e. Calculate BSWNB's net interest margin. (Please show work) ((1150/13884) - (475/9012)) 3.01%
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