Question

Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities.

Balance Sheet (in thousands)
Assets					Rate Earned (%)
Cash and due from banks	$	6,000				0
Investment securities		22,000				8
Repurchase agreements		12,000				6
Loans less allowance for losses		80,000				10
Fixed assets		10,000				0
Other earning assets		4,000				9
Total assets	$	134,000
Liabilities and Equity					Rate Paid (%)
Demand deposits	$	9,000				0
NOW accounts		69,000				5
Retail CDs		18,000				7
Subordinated debentures		14,000				8
Total liabilities		110,000
Common stock		10,000
Paid-in capital surplus		3,000
Retained earnings		11,000
Total liabilities and equity	$	134,000

If the bank earns $120,000 in noninterest income, incurs $80,000 in noninterest expenses, and pays $2,500,000 in taxes, what is its net income? (Enter your answer in dollars, not thousands of dollars.

Answer 1