Estimate by management of gross loans that wont be

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Estimate by management of gross loans that won’t be repaid Gross loan losses (charge-offs) o Actual write-off Recoveries o Charged off but now collected Provisions for loan losses o Non-cash expense item on IS o Allocation to allowance listed on BS Net Income = Net Interest Income + Net Non-Interest Income Provision for LL Securities Gains (losses) - Tax Financial Statement Analysis o Strengths/Weaknesses of profitability and financial conditions o Compare ratios - current performance, perf. over time and relative to peers ROE framework o
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o o o EM measure of leverage (it has a multiplier effect) Fraction of assets can go into default before insolvent o ROE profit per dollar of equity ROA - profit relative to assets EM extents’ assets funded with equity relative to debt PM generate net income from interest and non-interest income AU about of interest and non-interest income per dollar of assets Slide 21 of lecture slides (depth required for assignment)
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