The financial statements for MHM Bank (MHM) are shown below: Assets Cash and due from banks Demand deposits at other FIS Investments Federal funds sold Loans (less reserve for loan losses of 4,200) Balance Sheet MHM Bank $ 2,100 Liabilities and Equity Demand deposits 2,900 Small time deposits 6,420 Jumbo CDs 3,170 Federal funds purchased 20,390 2,450 Other liabilities Equity $ 37,430 Total liabilities/equity Premises Total assets Income Statement MHM Bank Interest income $ 4,418 Interest expense 2,374 Provision for loan losses 1,900 Noninterest income 880 $ 10,800 10,530 7,850 650 4,130 3,470 $ 37,430 Noninterest expense Taxes 1,155 415 a. Calculate the dollar value of MHM's earning assets. b. Calculate the dollar value of MHM's Interest-bearing liabilities. c. Calculate MHM's spread. (Do not round Intermediate calculations. Round your percentage answer to 3 decimal places. (e.g., 32.161)) d. Calculate MHM's interest expense ratio. (Round your percentage answer to 3 decimal places. (e.g., 32.161)) a. MHM's earning assets b. MHM's interest-bearing liabilities C MHM's spread % d. MHM's interest expense ratio %

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The financial statements for MHM Bank (MHM) are shown below:
Assets
Cash and due from banks
Demand deposits at other FIS
Investments
Federal funds sold
Loans (less reserve for loan losses of 4,200)
Balance Sheet MHM Bank
$ 2,100
Liabilities and Equity
Demand deposits
2,900
Small time deposits
6,420
Jumbo CDs
3,170
Federal funds purchased
20,390
2,450
Other liabilities
Equity
$ 37,430
Total liabilities/equity
Premises
Total assets
Income Statement MHM Bank
Interest income
$ 4,418
Interest expense
2,374
Provision for loan losses
1,900
Noninterest income
880
$ 10,800
10,530
7,850
650
4,130
3,470
$ 37,430
Noninterest expense
Taxes
1,155
415
a. Calculate the dollar value of MHM's earning assets.
b. Calculate the dollar value of MHM's Interest-bearing liabilities.
c. Calculate MHM's spread. (Do not round Intermediate calculations. Round your percentage answer to 3 decimal places. (e.g.,
32.161))
d. Calculate MHM's interest expense ratio. (Round your percentage answer to 3 decimal places. (e.g., 32.161))
a. MHM's earning assets
b.
MHM's interest-bearing liabilities
C
MHM's spread
%
d.
MHM's interest expense ratio
%
Transcribed Image Text:The financial statements for MHM Bank (MHM) are shown below: Assets Cash and due from banks Demand deposits at other FIS Investments Federal funds sold Loans (less reserve for loan losses of 4,200) Balance Sheet MHM Bank $ 2,100 Liabilities and Equity Demand deposits 2,900 Small time deposits 6,420 Jumbo CDs 3,170 Federal funds purchased 20,390 2,450 Other liabilities Equity $ 37,430 Total liabilities/equity Premises Total assets Income Statement MHM Bank Interest income $ 4,418 Interest expense 2,374 Provision for loan losses 1,900 Noninterest income 880 $ 10,800 10,530 7,850 650 4,130 3,470 $ 37,430 Noninterest expense Taxes 1,155 415 a. Calculate the dollar value of MHM's earning assets. b. Calculate the dollar value of MHM's Interest-bearing liabilities. c. Calculate MHM's spread. (Do not round Intermediate calculations. Round your percentage answer to 3 decimal places. (e.g., 32.161)) d. Calculate MHM's interest expense ratio. (Round your percentage answer to 3 decimal places. (e.g., 32.161)) a. MHM's earning assets b. MHM's interest-bearing liabilities C MHM's spread % d. MHM's interest expense ratio %
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