《商业银行管理》课习题答案Problems4.docVIP

Problems 4-1. The missing items from the Report of Condition and Report of Income of Evergreen National Bank are given below: Report of Condition Items from Banks $ 27 (550-43-18-10-348-11-6-87 = 27) Gross Loans 373 (348+6+19 = 373) Savings Deposits and NOW Accounts 36 (440-21-227-49-107 = 36) Stockholders Equity Capital 50 (550-440-41-19 = 50) Report of Income Items Interest and Fees on Loans $168 (180-5-7 = 168) Service Charges on Customer Deposits 11 (39-20-8 = 11) Wages, Salaries, and Employee Benefits 42 (54-5-7 = 42) Net Interest Income 21 (180-159 = 21) Net Noninterest Income -15 (39-54 = -15) Net Income After Taxes 0 (180+39-159-54-4-2=-120) Alternative Scenario 1: Given: Total revenues increase to $225, total interest expense increases to $185, total noninterest income increases to $51, and total noninterest expenses increase to $72. Solution: Net Income after taxes = $225-185-72-4-2 = -$38 Alternative Scenario 2: Given: All revenue items increase by 100% and all expense items increase by 92%. Solution: Net Income after taxes = [($180+39) X 2]-[($159+54+4+2) X 1.921 = [$219 X 2] -[$339 X 1.92] = $438- $421 = $17 4-2. The items requiring calculation and their dollar amounts are: Net Interest Income = Total Interest Income - Total Interest Expense = $271 -$205 = $66 Net Noninterest Income = Total Noninterest Income - Total Noninterest Expense = $23- $40 = -$17 Total Operating Revenues = Total Interest Income + Total Noninterest Income = $271 + $23 = $294 Total Operating Expense = Total Interest Expenses + Total Noninterest Expenses + Provision for Loan Loss = $205 + $40 + $13 = $258 Net Income Before Taxes = Total Operating Revenues - Total Operating Expenses = $294 - $258 = $36 Net Income After Taxes = Net Income Before Taxes - Income Taxes = $36 - $5 = $31 Increase in Banks Undivided Profits = Net Income After Taxes - Common Dividends = $31 -$11 = $20 Alternative Scenario 1: Given: Gap