6 Two depository institutions have composite CAMELS ratings of 1 or 2 and are well capitalized.' Thus, eachinstitution falls into the FDIC Risk Category I deposit insurance assessment scheme. Further, theinstitutions have the following financial ratios and CAMELS ratings: Use TableTier I leverage ratio (%)Loans past due 30-89 days/gross assets (%)Nonperforming assets/gross assets (%)Net loan charge-offs/gross assets (%)Net income before taxes/risk-weighted assets (%)Adjusted brokered deposits ratio (%)CAMELS components:CAMELSUniform AmountTier I leverage ratio (%)Loans past due 30-89 days/gross assets (%)Nonperforming assets/gross assets (%)Net loan charge-offs/gross assets (%)Net income before taxes/risk-weighted assets (%)Adjusted brokered deposits ratio (%)Weighted average CAMELS component ratingsInitial assessment rateInstitution 1Institution Institution 218.79References eBook &Resources0.620.520.452.320.00113117.920.730.670.49Institution 22.0315.73Calculate the initial deposit insurance assessment rate for each institution. (Do not round intermediatecalculations. Round your answers to 2 decimal places. (e.g., 32.161))321313Pricing Multiplier4.861(0.056)0.5751.0741.210(0.764)0.0651.095

Using standard CAMEL component weights, given belowComponentWeightC25%A20%M25%E10%L10%S10%Now lets…

Calculate the initial deposit insurance assessment rate for each institution. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.161)) Initial assessment rate Institution 1 Institution 2

Calculate the initial deposit insurance assessment rate for each institution. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.161)) Initial assessment rate Institution 1 Institution 2

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter6: Accounting Quality

Section: Chapter Questions

Problem 4QE

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