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XA Question 32 16 As a manager of the Bank of Hawall, you anticipate the following: 1. Loan loss reserve at the end of year - 1 percent of assets 2. Interest income over the next year = 9 percent of assets 3. Non-Interest expense over the next year = 3 percent of assets 4. Non-Interest income over the next year = 1 percent of assets 5. Interest expense over the next year - 5 percent of assets 6, Tax rate on income - 30 percent of assets 7. Capital ratio (capital to assets) at the end of year 5 percent Using the information above, calculate the following: (Totat: 2x8=16 points) 1. Forecast Bank of Hawails net interest margin 2. Forecast Bank of Hawail's net operating margin 3. Forecast Bank of Hawaii's Net Income (as a percent of Assets) 4. Forecast Bank of Hawaii's 1. Proht margin II. Total Asset Turnover III. Equity multiplier IV. Return on Assets V. Return on Equity ank of Hawaii is considering a shift in its asset structure to reduce its concentration of Treasury bonds and increase its volume of loan mall businesses. Identify each income statement item that would be affected by this strategy and explain whether the forecast for the em would increase or decrease. (3 points) (no calculations required) XA Question 32 16 As a manager of the Bank of Hawall, you anticipate the following: 1. Loan loss reserve at the end of year - 1 percent of assets 2. Interest income over the next year = 9 percent of assets 3. Non-Interest expense over the next year = 3 percent of assets 4. Non-Interest income over the next year = 1 percent of assets 5. Interest expense over the next year - 5 percent of assets 6, Tax rate on income - 30 percent of assets 7. Capital ratio (capital to assets) at the end of year 5 percent Using the information above, calculate the following: (Totat: 2x8=16 points) 1. Forecast Bank of Hawails net interest margin 2. Forecast Bank of Hawail's net operating margin 3. Forecast Bank of Hawaii's Net Income (as a percent of Assets) 4. Forecast Bank of Hawaii's 1. Proht margin II. Total Asset Turnover III. Equity multiplier IV. Return on Assets V. Return on Equity ank of Hawaii is considering a shift in its asset structure to reduce its concentration of Treasury bonds and increase its volume of loan mall businesses. Identify each income statement item that would be affected by this strategy and explain whether the forecast for the em would increase or decrease. (3 points) (no calculations required)

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