Question

Using the following financial information for Wilson National Bank, calculate below liquidity for Wilson National Banks.

	Most Recent Year
Assets: Cash and due from depository institutions	$ 350,000
U.S. Treasury securities	176,000
Other securities	339,000
Pledged securities	387,000
Federal funds sold and reverse repurchase agreements	175,000
Loans and leases net	2,148,000
Total Assets	3,575,000
Liabilities:
Demand deposits	650,000
Savings deposits	730,000
Time deposits	1,100,000
Total deposits	2,480,000
Core deposits	900,000
Brokered deposits	58,000
Federal funds purchased and repurchase agreements	217,000
Other money market borrowings	25,000

1. Cash Position Indicator:
2. Liquid securities indicator:
3. Capacity ratio:
4. Core deposit ratio:

Answer 1

a. Cash Position Indicator: Cash and due from banks/ Total assets = $350,000/$3,575,000 = 9.79%

b. Liquid securities indicator: US Govt Sec/ Total assets = $176,000/$3,575,000 = 4.92%

c. Capacity ratio = Net loans and leases/ Total assets = $2,148,000/$3,575,000 = 60.08%

d. Core deposit ratio = Core deposits/ Total assets = $900,000/$3,575,000 = 25.17%

Wilson bank appears to have mixed liquidity trends, though most indicators reflect declining liquidity. Cash assets are falling relative to total assets. Holdings of US Government Securities are also declining relative to total assets.