Question

In: Finance

If you know the following information: total interest income $150 total interest expense 100 total noninterest...

If you know the following information:

total interest income $150

total interest expense 100

total noninterest income 75

total noninterest expense 90

provision for loan losses 10

income taxes 4

increases in banks undivided profits 6

calculate the following:

net interest income

net non interest income

pretax net operating income

net income after taxes

total operating revenues

total operating expenses

dividends paid to common stockholders

Solutions

Expert Solution

Ans.1. Net Interest Income = Total interest Income - total interest expenses = $150-$100 = $50

Ans.2. Net non interest income = total non-interest income - total non-interest expenses

Net non interest income = $75-$90 = ($15).

Ans.3.Net operating Income = Operating Revenue- Operating Expenses.

Net operating income = Net Interest Income + Net non interest income - ( total interest expenses+ total non-interest expenses+ provision for loan losses = $150+$75 - ($100+ $90+ $10) = $25.

Net operating Income = $150+$75 -( $100+ $90) = $35.

Ans.4. Net operating Income after taxes = Net operating Income - Taxes = $35 -$4 = $31.

Ans.5.Total operating Revenue = Total interest Income + Total non-interest income = $150+ $75 = $225.

Ans.6.Total operating Expenses = Total interest expenses+ total non-interest expenses = $100+$90 = $190.

Ans.7. Dividend paid to shareholders = Net Income - increase in banks undivided profits = $31 - $6 = $25


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