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# Bank A (Dollars in Millions) Assets Liabil

Figure 5-1
Bank A (Dollars in Millions)
Assets Liability and Equity
Cash \$ 850 Deposits \$6,475
Securities 1,925 Other Borrowing 1,645
Loans 5,400 Equity 1,020
Other 965 Total \$9,140
Total \$9,140

Income Statement
Interest Income on Loans \$450
Interest Income on Securities 95
Interest Expense 246
Non-interest Income 78
Non-interest Expense 112
Provision for Loan Loss 35
Taxes 115
NI \$115

5a). [3] The bank's ROA is

5b). [3] The bank's ROE is

5c). [3] The bank's profit margin is

5d). [2] The bank's asset utilization ratio is

#### Solution Preview

5a). [3] The bank's ROA is

Net income of 115 / total assets of 9140 = 0.0125 = 1.26%

5b). [3] The bank's ROE is

Net income 115 / equity of 1020 = 0.1127 = 1.13%

5c). ...

#### Solution Summary

Bank A (Dollars in Millions)
Assets Liability and Equity
Cash \$ 850 Deposits \$6,475
Securities 1,925 Other Borrowing 1,645
Loans 5,400 Equity 1,020
Other 965 Total \$9,140
Total \$9,140

Income Statement
Interest Income on Loans \$450
Interest Income on Securities 95
Interest Expense 246
Non-interest Income 78
Non-interest Expense 112
Provision for Loan Loss 35
Taxes 115
NI \$115

5a). [3] The bank's ROA is

5b). [3] The bank's ROE is

5c). [3] The bank's profit margin is

5d). [2] The bank's asset utilization ratio is

\$2.19