Reference no: EM132787059

Balance Sheet for NB bank earns 1% on its assets and has a 20% tax rate. It earns 8% on loans, and 6% on investments. It pays 4% on time deposits, and 3% on federal funds purchased. Demand deposits pay no interest.

(in $M)

Assets                                                    Liabilities & Equity

Cash and due from banks $20        Demand deposits $40

Investments 200                          Time deposits 150

Loans 120                             Federal funds purchased 120

Premises 20                           Equity 50

360                                               $360

Problem (a) Construct an Income Statement for NB bank (assume a 20% tax rate and zero loan loss provision).

Problem (b) With this information construct as many ratios of bank performance as you can with the data available.