What is the banks net noninterest margin What is the banks n

Balance Sheet Income Statement $100 Interest Income Securities Investment Net Loans Net Premises and Equipment 600 1,200 300 $2,200 Interest Expenses Non-Interest Income Non-Interest Expenses Provision for Loan Losses $400 150 50 100 60 Total Assets $1,100 800 300 $2,200 Pre Tax Net Operating Income Securities Losses Taxes Net Income 40 45 Non-Deposit Borrowings Equity Capital Total Liabilities and Equity

Solution

a) Net non interest Margin Net non interest Margin = (Non-Interest Income - Non-Interest Expenses)/Total Assets Net non interest Margin = ($50 - $100)/$2200 -2.27% b) net operating margin? Net operating Margin = (Total operating Revenue - Total operating Expenses)/Total Assets Net operating Margin = (($400 + $50)-(150+100+60))/2200 6.36% C)Earning Spread Earning Spread = Total Interest Income/ Total Earning Assets -Total interest expenses/Total interest bearing liabilities Earning Spread = ($400/(600+1200))-(150/(1100+800) 14.33% d) net profit margin Net Profit Margin = Net Income/Total operating Revenue Net Profit Margin = 55/400 + 50 12.22% Income Statement Interest Income 400 Interest Expenses -150 Non-Interest Income 50 Non-Interest Expenses -100 Provision for Loan Losses -60 Pre Tax Net Operating Income 140 Securities Gains (Losses) -40 Taxes -45 Net Income 55