3. The financial statements for MIB Bank are shown below:Balance SheetAssetsLiabilities and EquityCash400Demand deposits$ 3,000Demand deposits from other Fls700Small time deposits5,000Investments2,000Jumbo CDs1,200Federal funds sold1,000Federal funds purchased1,000Loans6,500Equity800Reserve for loan losses-400Premises800Total Assets11,000Total Equity and Liabilities I1,000Income StatementInterest IncomeS 2,500Interest expense1,680Provision for loan losses100Noninterest income200Noninterest expense450Тахes50d. Interest expense ratioe.Provision for loan loss ratiof. Calculate spreadg. Calculate net interest marginh. Calculate overhead efficiencyi. If UCM bank has spread 3% and overhead efficiency 60%, can you compare with these two banksand write down your comments?What are the different characteristics between MIB bank and UCM bank and write down yourcomments?

Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Answered: 3. The financial statements for MIB…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 18MCQ

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Here is Simple Bank’s balance sheet (with associated interest rates): Assets $800 million Business Loans, 7.5% $200 million Corporate Bonds, 4.25% $25 million Reserves, Fed pays 0.5% $10 million Real Assets Liabilities $550 million Demand Deposits $360 million Time Deposits, 2.5% $25 million Preferred Shares, 3.3% $100 million Common Shares Q. If capital requirements are 8% for loans and 6% for bonds, calculate the bank’s capital excess or deficiency.
5. The followings ate the information about Rainbow National Bank:Report of Income Tk.Interest income 1,250Interest expense 500Total assets 40,000Securities losses or gains 1,000Earning assets 30,000Total liabilities 30,000Taxes paid 1,000Shares of common stock outstanding 3,000Noninterest income 8,000Noninterest expense 6,000Provision for loan losses 2,500Calculate ROE, ROA, Net interest margin, Earnings per share, Net noninterest marginand Net operating margin.Alternative Scenarios:Suppose interest income, interest expenses, noninterest income, and noninterestexpenses each decline by 5 percent while all other revenue and expense items shown inthe preceding table remain unchanged. What will be happen to Rainbow ROE, ROA,and earnings per share?
Calculate the amount of liquidity a bank can generate from selling its AFS portfolio using the following information:USTs held in AFS = $92,053,000Securities held in HTM = $13,500,000Loans = $69,680,000Settlement occurs on T+2Maturing on T+1 = $16,000,000Haircut = 5%USTs in AFS used as collateral for RP liabilities (i.e./ "encumbered") = $19,740,000 $56,313,000 $53,497,350 $52,697,350 $51,710,350
Using the data given below, compute for the total amount of items that meet the definition of financial asset Cash P 100,000 Investment in shares – FVTPL 500,000 Investment in associate 2,000,000 Accounts receivable 1,000,000 Inventories 800,000 Prepaid rent 50,000 Interest rate swap receivable 200,000 Investment in debt securities – FVTOCI 400,000 Investment in debt securities – AC 300,000 Land 2,000,000 Buildings 3,000,000 Machinery and equipment 1,500,000 Patents 250,000
A bank has risk-weighted assets or $425 million and the following sources of regulatory capital (in $ millions): Allowance for Loan Losses $3.02 Common Stock (Par) $0.85 Intermediate-Term Preferred Stock $4.87 Perpetual Preferred Stock $3.43 Subordinated Debt $3.24 Surplus $7.83 Undivided Profit $20.04 What is the bank's ratio of Tier 2 capital to risk-weighted assets? _______ . Calculate the answer by read surrounding text. Express in %, to the nearest 0.01%; drop the % symbol.
Bank L's balance sheet(in millions) is provided below.The bank does not have any off-balance-sheet activity. Please calculate the total risk-based capital ratio of this bank Assets Liabilities and Equity Cash $20 Deposits $980 Treasury bonds(risk-weight=0) $40 Subordinated debentures $25 Mortgate loans(risk-weight=50%) $600 Common Stock $45 Business Loans $430 Retained earnings $40 Total assets $1090 Total liabilities and equity $1090
Nienge Bank has the following balance sheet (in millions) with the risk weights in parentheses.AssetsCashOECD Interbank depositsK3Mortgage loansConsumer loansTotal Assets(0%) K20(20%) K25liabilities and EquityDepositsSubordinated debt (2.5 years)K175(50%) K70(100% K70K185Cumulative preferred stockEquityTotal Liabilities & EquityK5K2K185In addition, the bank has K30 million in performance-related standby letters of credit(SLCs), and K300 million in six-year interest rate swaps. Credit conversion factors follow:Performance-related standby LCs50%1-5 year foreign exchange contracts5%1-5 year interest rate swaps0.5%5-10 year interest rate swaps1.5%d.Discuss the major shortcomings of the Basle I accord.
Using the data given below, compute for the total amount of items that meet the definition of financial asset Cash P 100,000 Fair value through profit or loss securities 500,000 Investment in associate 2,000,000 Trade receivable 1,000,000 Inventories 800,000 Prepaid insurance 50,000 Interest rate swap receivable 200,000 Investment in debt securities – FVTOCI 400,000 Investment in debt securities – AC 350,000 Land 2,000,000 Buildings 3,000,000 Machinery and equipment 1,500,000 Patents 250,000
The latest statement of financial position for Malorie Limited is summarized below: GH¢'000 GHc '000 GH 000 Non-current assets (NBV) 5.700 Current assets Inventory 3.500 Receivables 1.800 5.300 Current liabilities Unsecured payables 4.000 Unsecured Bank overdraft 1.600 5.600 (300) Total assets less current liabilities 5.400 Non-Current Liabilities 10% secured debentures (13.000 Net assets 2,400 Financed by: Stated capital Income Surplus 4.000 (1.600) 2.400 Malorie's stated capital consists of 4.000.000 ordinary shares issued at GHel.00 and fully paid. The non-current assets comprise freehold property with a book value of GH¢3.000.000 and plant and machinery with a book value of GHc2,700,000. The debentures are secured on the freehold property In recent years the company has suffered a series of trading losses which have brought it to the point of liquidation. The directors estimate that in a forced sale the assets will realize the following amounts. GHSFreehold premises Plant and…
The following information is for Rainbow National Bank: Report of Income $ Interest income 2,250.00 Interest expense 1,500.00 Total assets 45,000.00 Securities losses or gains 21.00 Earning assets 40,000.00 Total liabilities 38,000.00 Taxes paid 16.00 Shares of common stock outstanding 5,000 Noninterest income 800.00 Noninterest expense 900.00 Provision for loan losses 250.00 Please calculate: ROE --------- ROA --------- Net interest margin --------- Earnings per share --------- Net noninterest margin --------- Net operating margin --------- Alternative Scenarios: Suppose interest income, interest expenses, noninterest income, and noninterest expenses each increase by 3 percent while all other revenue and expense items shown in the preceding table remain unchanged. What will happen to Rainbow ROE,…
Below is the Statement of Financial Position for Rafah Islamic Bank: RAFAH ISLAMIC BANK STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 DECEMBER 2020 Assets RM Non current Asset 5,670,000 Long Term Investment 654,000,000 Financing (Net) 1,244,000,000 Corporate Bond Investment 919,094,000 Commercial Securities Investment 389,543,000 Deposits in other financial institutions 487,043,700 Other current assets…
Compute the Total risk-based capital ratio for this bank. Assets Liabilities Cash 2 Deposits X US Treasury securities 6 Subordinated Debt 2 Fannie Mae MBS 12 Residential mortgages 21 Retained earnings 4 Small business loans 53 Common stock 4

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