# Calculating Net Noninterest Income ## Step 1: List the Relevant Figures - **Total Noninterest Income:** $41 million - **Total Noninterest Expenses (including PLL):** $28 million ## Step 2: Definition **Net Noninterest Income** is calculated as: \[ \text{Net Noninterest Income} = \text{Total Noninterest Income} - \text{Total Noninterest Expenses (excluding PLL)} \] However, the problem states that the $28$ million figure **includes Provision for Loan Losses (PLL)**. Normally, **PLL should not be included** in noninterest expenses for this calculation, as it’s typically accounted for below net noninterest income in the income statement. ### What to Do? - We need to **exclude PLL** from noninterest expenses to get the correct net noninterest income. ## Step 3: Adjust for PLL - **Total Noninterest Expenses (including PLL):** $28 million - **Provision for Loan Losses (PLL):** $6 million So, \[ \text{Total Noninterest Expenses (excluding PLL)} = \$28\ \text{million} - \$6\ \text{million} = \$22\ \text{million} \] ## Step 4: Calculate Net Noninterest Income \[ \text{Net Noninterest Income} = \$41\ \text{million} - \$22\ \text{million} = \$19\ \text{million} \] --- ## Final Answer \[ \boxed{\$19\ \text{million}} \] **The bank's net noninterest income is \$19 million.** --- ### Summary Table | Description | Amount (in millions) | |---------------------------------------------|----------------------| | Total Noninterest Income | $41 | | Total Noninterest Expenses (including PLL) | $28 | | Less: Provision for Loan Losses (PLL) | $6 | | Total Noninterest Expenses (excluding PLL) | $22 | | Net Noninterest Income | $19 |

# Objective To calculate the bank's net noninterest income using the provided financial data. ## Given Data - **Total Noninterest Income:** $41 million - **Total Noninterest Expenses (including Provision for Loan Losses):** $28 million - **Provision for Loan Losses (PLL):** $6 million ## Formula The formula for calculating Net Noninterest Income is: \[ \text{Net Noninterest Income} = \text{Total Noninterest Income} - \text{Total Noninterest Expenses (excluding PLL)} \] ## Steps for Calculation ### Step 1: Adjust Total Noninterest Expenses 1. **Calculate Total Noninterest Expenses (excluding PLL):** \[ \text{Total Noninterest Expenses (excluding PLL)} = \text{Total Noninterest Expenses} - \text{PLL} \] \[ = 28\ \text{million} - 6\ \text{million} \] \[ = 22\ \text{million} \] ### Step 2: Calculate Net Noninterest Income 2. **Use the adjusted expenses to calculate Net Noninterest Income:** \[ \text{Net Noninterest Income} = \text{Total Noninterest Income} - \text{Total Noninterest Expenses (excluding PLL)} \] \[ = 41\ \text{million} - 22\ \text{million} \] \[ = 19\ \text{million} \] --- ## Final Answer The bank's net noninterest income is **$19 million**.

## Explanation of Steps ### Step 1: Adjust Total Noninterest Expenses In this step, we adjust the total noninterest expenses by excluding the provision for loan losses (PLL). The total noninterest expenses provided includes PLL, which is not typically considered in the calculation of net noninterest income. By subtracting PLL from the total noninterest expenses, we arrive at the correct amount that accurately reflects the bank's operational costs. ### Step 2: Calculate Net Noninterest Income Here, we compute the net noninterest income using the adjusted total noninterest expenses. By subtracting the recalculated expenses (excluding PLL) from the total noninterest income, we determine the bank's net noninterest income. This figure represents the bank's income generated from noninterest activities after accounting for the relevant expenses, providing insight into its financial performance.