Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid...
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Accounting
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? (Please show work)
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