Question

Balance Sheet MHM Bank Assets Liabilities and Equity Cash and due from banks $ 2,030 Demand deposits Demand deposits at other PIS 2,200 Small time deposits Investments 6,300 Jumbo CDs Federal funds sold 3,100 Federal funds purchased Loans (less reserve for loan losses of 3,500) 20,270 Other liabilities Premises 2,380 Equity Total assets $36,280 Total liabilities/equity $10,730 10, 460 7,780 580 3,330 3,400 $36,280 Income Statement MHM Bank Interest income Interest expense Provision for loan losses Noninterest income Noninterest expense Taxes $4,288 2,254 1,200 810 1,085 345 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 answer to 3 decimal places. (e.g.. 32.161)) d. Calculate MHM's interest expense ratio. (Round your answer to 3 decimal places. (e.g.. 32.161)) MHM's eaming assets MHM's interest-bearing liabilities MHM's spread d. MHM's interest expense ratio

Answer 1

a MHM's earning assets Investments+Loans $ 26,570 -6300+20270 6 MHM's interest-bearing liabilities Demand deposits+Jumbo CDs+Federal funds purchased $ 19,090 =10730+7780+580 (Interest income-Interest expense) (Earnings assets- Interest bearing liabilities) CMHM's spread 27.193% =(4288-2254)/(26570-19090) d MHM's interest expense ratio interest income/Interest expense 190.240% -4288/2254

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