The First Horizon Bank has the following balance sheet: Assets ($1,000,000s) Liabilities ($1,000,000s) Cash = $60 T-bills and Bonds = $270 Deposits = $700 Long-term Debt = $340 Loans to Other Banks = $110 Equity = $95 Commercial Loans = $380 Mortgages $310 Total Assets $1,130 Total Liabilities & Equity = $1,130 The net profit for the bank was $12.5 million. A required reserve is specified at 5% of deposits. What is the bank's ROE (Return on Equity)?

The First Horizon Bank has the following balance sheet: Assets ($1,000,000s) Liabilities ($1,000,000s) Cash = $60 T-bills and Bonds = $270 Deposits = $700 Long-term Debt = $340 Loans to Other Banks = $110 Equity = $95 Commercial Loans = $380 Mortgages $310 Total Assets $1,130 Total Liabilities & Equity = $1,130 The net profit for the bank was $12.5 million. A required reserve is specified at 5% of deposits. What is the bank's ROE (Return on Equity)?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 30BEB: Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of...

See similar textbooks

Similar questions

Nearby Bank has the following balance sheet (in millions): Assets Liabilities and Equity Cash $60 Demand deposits $140 5-year T notes $60 1-year CD $160 30-year mortgages $200 Equity $20 Total Assets $320 Total L and E $320 What is the maturity gap for Nearby Bank?
The financial statements for MHM Bank (MHM) are shown below: Calculate the dollar value of MHM’s earning assets. Calculate the dollar value of MHM’s interest-bearing liabilities. Calculate MHM’s spread. Calculate MHM’s interest expense ratio.
28. Assuming the following balance sheet, what is the Bank's CAR? ASSETS ($1,000,000s) Cash Fed Reserve Deposits Treasuries Mortgages Commercial Loans Stocks and Bonds TOTAL ASSETS a. 3.75% b. 5.42% c. 7.85% d. 9.78% e. 10.58% I LIABILITIES AND EQUITY ($1,000,000s) Demand Deposits Time Deposits 185 97 548 Bonds/Other Debt 2561 Equity 1298 236 4925 TOTAL LIABS & EQUITY 2187 2210 258 270 4925
Megalopolis Bank has the following balance sheet and income statement. Balance Sheet (in millions) Demand deposits $ 10,300 36,000 55,000 Retail CDs NOW accounts Assets Cash and due from banks Investment securities Repurchase agreements Loans Fixed assets Other assets Total assets Income Statement (in millions) Interest on fees and loans Interest on investment securities Interest on repurchase agreements Interest on deposits in banks Total interest income Interest on deposits Interest on debentures Total interest expense Net interest income Provision for loan losses Noninterest income. Noninterest expenses Income before taxes Taxes Net income a. lb. C. d. e. Return on equity Return on assets Asset utilization Equity multiplier Profit margin f. 9. h. Noninterest expense ratio i. Tax ratio Interest expense ratio Provision for loan loss ratio For Megalopolis, calculate (Round your percentage answers and equity multiplier to 2 decimal places. (e.g., 32.16)): 8 %6 % X % % %6 %6 % 103,000…
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 3,400) Premises Total assets Income Statement MHM Bank Interest income Interest expense Provision for loan losses Noninterest income Noninterest expense Taxes a. MHM's earning assets b. MHM's interest-bearing liabilities Balance Sheet MHM Bank $ 2,020 2,100 6,280 3,090 20,260 2,370 $36, 120 C. MHM's spread d. MHM's interest expense ratio $ 4,258 2,224 1,100 800 1,075 335 Liabilities and Equity 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)) % % Demand deposits Small time deposits…
Please explain step by step
As loan analyst for Utrillo Bank, you have been presented the following information. Toulouse Co. Lautrec Co. Assets Cash $ 120,000 $ 320,000 Receivables 220,000 302,000 Inventories 570,000 518,000 Total current assets 910,000 1,140,000 Other assets 500,000 612,000 Total assets $1,410,000 $1,752,000 Liabilities and Stockholders' Equity Current liabilities $ 305,000 $ 350,000 Long-term liabilities 400,000 500,000 Capital stock and retained earnings 705,000 902,000 Total liabilities and stockholders' equity $1,410,000 $1,752,000 Annual sales $ 930,000 $1,500,000 Rate of gross profit on sales 30% 40% Each of these companies has requested a loan of $50,000 for 6 months with no collateral offered. Because your bank has reached its quota for loans of this type, only one of these requests is to be granted. Instructions Which of the two companies, as judged by the information given above,…
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.…
Please explain step by step
Based on the information provided below about banks A and B, compute for each bank its return on assets (ROA), return on equity (ROE) and Equity Multiplier. Show your work. a. Bank A has net profit after taxes of $2.38 million and the balance sheet below: Bank A (in millions) Assets Liabilities Reserves $10 Deposits $100 Loans $80 Borrowing $15 Securities $50 Bank Capital $25 b. Bank B has net profit after taxes of $1 million and the balance sheet below: Bank B (in millions) Assets Liabilities Reserves $8 Deposits $75.0 Loans $60 Borrowing $5.0 Securities $22 Bank Capital $10.0
Consider the following bank balance sheet and the associated yields for earning assets and costs of liabilities. Assets Amount (000). Rate cash 400. 0% securitie 1600. 6.5% commercial loans 4000 9.0% credit card loans 3300. 10.0% loss reserves. 200 other assets 500 total assets. 10,000 Liabilities and equity Demand deposits. 1600 MMDAs. 3600 6.0% CDs. 2600 6.5% ST deposits. 1360. 5.0% Deferret tax credit. 200 Equity 640 total. 10000 Assume that net charge-offs $44,000 cash taxes paid $78,000 and allocated risk capital is $550,000 with a capital charge of 6 percent. determine : a) Calculate and show the bank income statement.
The amount of Gross Loans is The following are real Iife data extracted from the Housing Bank financial statements. Use them to answer the questions. Additional Information: Accumulated Provislons for Loan Losses (end balance) 250; Number of Outstanding Shares 315,000,000 (315 MIllon) and share price JD9 (Balance Sheet (in Milion (Assets (JD Cash and Balances at Central Banks Balances at Banks and Financial institutions Deposits at Banks and Financial institutions Total Cash and Due trom Depository institutions Trading Investments Available for Sale Investments Held to Maturity Investments, Net Total Securitles 1,478 743 53 2,221 581 745 1,327 Investments in Affilates 2,369 Loans (or Credit Facilities), Net 93 Fixed Assets, Net 6. Doferred income Tax Assets Other Assets Total Asseta (Uabilitles (JD Customers Deposits Banks & Financial Institutions Deposits 71 6,090 4,430 284 Total Deposits Cash Margins 4,714 290