Question

Consider the ratios for First American Bank (FAB) and Community Bank of Mississippi (CBM Assume both banks operate in the same trade area with the same general business Strategy and both banks are of roughly the same size as measured by total assets) PAR CEM Efficiency - Noclaterest Expense (OE) Rati Net Interest Income (ND-onterest Income (OI) Aucts per Average Total Assets Employee Number of Employees Net Interest Income (NTI) Average Earning Assets ROA Net Income Average Total Assets NIM Based on the efficiency ratio. Select is performing better lie. more profitable Based on Select ..we can see Select is more profitable and better manages noninterest income and expense despite having a lower Select Dwight Schrute is an analyst comparing three bank's ability to control expenses and generate noninterest income. Based on the following table, which bank can best control expenses and generate noninterest income? Goliath National Bank $0.1496 11.95 1.12 Bank of the Fast 64.100 10.03 Ninth State Bank 48239 10.54 1.02 Emiciency Ratio Tier 1 Risk-Based Capital Liquidity Coverage Ratio 1.12 Galata Ninth State Bank Botha and

drop down 1: FAB or CBM

drop down 2: NIM or ROA

drop down 3: FAB or CBM

drop down 4: NIM or ROA

Answer 1

1]

1 - FAB (because its expenses as a % of income is lower)

2 - ROA (ROA of FAB is higher)

3 - FAB (its efficiency ratio is better)

4 - NIM (NIM of FAB is lower)