2. Two depository institutions have composite CAMELS ratings of 1 or 2 and are “well capitalized.” Thus, each institution falls into the FDIC Risk Category I deposit insurance assessment scheme. Further, the institutions have the following financial ratios and CAMELS ratings: Calculate the initial deposit insurance assessment for each institution. Institution A Institution B Finanical Ratios: Leverage Ratio 8.55 8.25 Nonperforming Loans and Lease/Gross Assets 0.35 5.12 Other Real Estate owned/Gross Assets 0.42 0.75 Net Income Before taxes/ Total Assets 2.00 1.65 Brokered Deposit Ratio 82.2 76.5 One-Year Asset Growth 4.35 6.8 Loans as a Percent of Total Assets Construction & Development 0 0 Commerical & Industrial 10.56 18.68 Leases 0.65 2.15 Other Consumer 17.55 18.95
2. Two depository institutions have composite CAMELS ratings of 1 or 2 and are “well capitalized.” Thus, each institution falls into the FDIC Risk Category I deposit insurance assessment scheme. Further, the institutions have the following financial ratios and CAMELS ratings: Calculate the initial deposit insurance assessment for each institution. Institution A Institution B Finanical Ratios: Leverage Ratio 8.55 8.25 Nonperforming Loans and Lease/Gross Assets 0.35 5.12 Other Real Estate owned/Gross Assets 0.42 0.75 Net Income Before taxes/ Total Assets 2.00 1.65 Brokered Deposit Ratio 82.2 76.5 One-Year Asset Growth 4.35 6.8 Loans as a Percent of Total Assets Construction & Development 0 0 Commerical & Industrial 10.56 18.68 Leases 0.65 2.15 Other Consumer 17.55 18.95
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
| 2. Two depository institutions have composite CAMELS ratings of 1 or 2 and are “well capitalized.” Thus, each institution falls into the FDIC Risk Category I deposit insurance assessment scheme. Further, the institutions have the following financial ratios and CAMELS ratings: |
| Calculate the initial deposit insurance assessment for each institution. | |||
| Institution A | Institution B | ||
| Finanical Ratios: | |||
| Leverage Ratio | 8.55 | 8.25 | |
| Nonperforming Loans and Lease/Gross Assets | 0.35 | 5.12 | |
| Other Real Estate owned/Gross Assets | 0.42 | 0.75 | |
| Net Income Before taxes/ Total Assets | 2.00 | 1.65 | |
| Brokered Deposit Ratio | 82.2 | 76.5 | |
| One-Year Asset Growth | 4.35 | 6.8 | |
| Loans as a Percent of Total Assets | |||
| Construction & Development | 0 | 0 | |
| Commerical & Industrial | 10.56 | 18.68 | |
| Leases | 0.65 | 2.15 | |
| Other Consumer | 17.55 | 18.95 | |
| Loans to Foreign Government | 0 | 0.6 | |
| Real Estate Loans Residual | 0 | 0 | |
| Mutlifamily Residential | 0 | 1.1 | |
| Nonfarm Nonresidential | 0 | 0 | |
| 1-4 Family Residential | 41.1 | 37.41 | |
| Loans to Depository Banks | 0 | 0.5 | |
| Agricultural Real Estate | 1.1 | 0.35 | |
| Agriculture | 0.4 | 0.4 |
| CAMELS Components | ||
| CAMELS Components | Institution A | Institution B |
| C | 1 | 2 |
| A | 1 | 1 |
| M | 1 | 1 |
| E | 2 | 1 |
| L | 1 | 3 |
| S | 2 | 3 |
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