Question

Following data pertains to Castle State Bank Balance Sheet Income Statement Cash $ 100 Interest Income $ 400 Securities Investments $ 600 Interest Expense $ (150) Net Loans $ 1,200 Non-Interest Income $ 50 Net Premises and Equip $ 300 Non-Interest Expense $ (100) Total Assets $ 2,200 Provision for Loan Losses $ (60) Deposits $ 1,100 Pre Tax Net Operating Income $ 140 Non-Deposit Borrowings* $ 800 Securities Gains(Losses) $ (40) Equity Capital $ 300 Taxes $ (45) Total Liabilities and Equity $ 2,200 Net Income $ 55 *All Purchased Funds See data for Castle State Bank. What is the bank's asset utilization ratio? A. 20.45% B. 18.33% C. 12.22% D. 2.50% E. 7.33%

Answer 1

Asset Utilization ratio = Total revenues/ Total assets

= (Total Interest income+ Non interest income)/ Total assets

=(400+50)/ 2200

= 20.45%

Option A is right