Homework Help is Here – Start Your Trial Now!
Business
Finance
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. Weights for the CAMELS components to calculate the weighted average CAMELS rating are 25 percent, 20 percent, 25 percent, 10 percent, 10 percent, and 10 percent for the C, A, M, E, L, and S components, respectively. Further, the Institutions have the following financial ratios and CAMELS ratings: Institution A Institution B Financial Ratios: Leverage Ratio 8.70 7.83 Nonperforming Loans and Leases/Gross 0.43 0.58 Assets Other Real Estate Owned/Gross Assets 0.80 0.82 Net Income Before Taxes/Total Assets 2.23 2.05 Brokered Deposit Ratio 2.25 2.55 One-Year Asset Growth 6.80 6.15 Loans as a Percent of Total Assets: Leases Construction & Development Commercial & Industrial Other Consumer 0.48 0.38 14.36 13.80 1.55 0.65 18.35 18.05 Loans to Foreign Government 0.40 0.20 Real Estate Loans Residual 0.00 0.00 Multifamily Residential 0.90 0.85 Nonfarm Nonresidential 0.00 0.00 1-4 Family Residential 39.48 36.05 Loans to Depository Banks 1.20 1.60 Agricultural Real Estate Agriculture CAMELS components: c A 2.55 4.00 4.20 3.20 M 1 2 2 2 1 3 3 3 3 2 Calculate the Initial deposit Insurance assessment rate for each Institution. (Do not round Intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Institution A Institution B Initial assessment rate

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. Weights for the CAMELS components to calculate the weighted average CAMELS rating are 25 percent, 20 percent, 25 percent, 10 percent, 10 percent, and 10 percent for the C, A, M, E, L, and S components, respectively. Further, the Institutions have the following financial ratios and CAMELS ratings: Institution A Institution B Financial Ratios: Leverage Ratio 8.70 7.83 Nonperforming Loans and Leases/Gross 0.43 0.58 Assets Other Real Estate Owned/Gross Assets 0.80 0.82 Net Income Before Taxes/Total Assets 2.23 2.05 Brokered Deposit Ratio 2.25 2.55 One-Year Asset Growth 6.80 6.15 Loans as a Percent of Total Assets: Leases Construction & Development Commercial & Industrial Other Consumer 0.48 0.38 14.36 13.80 1.55 0.65 18.35 18.05 Loans to Foreign Government 0.40 0.20 Real Estate Loans Residual 0.00 0.00 Multifamily Residential 0.90 0.85 Nonfarm Nonresidential 0.00 0.00 1-4 Family Residential 39.48 36.05 Loans to Depository Banks 1.20 1.60 Agricultural Real Estate Agriculture CAMELS components: c A 2.55 4.00 4.20 3.20 M 1 2 2 2 1 3 3 3 3 2 Calculate the Initial deposit Insurance assessment rate for each Institution. (Do not round Intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Institution A Institution B Initial assessment rate

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
See similar textbooks
icon
Related questions
Question

Bhupatbhai 

Refer to Table 13-20, Table 13-21, Table 13-23 and Table 13-24. 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. Weights for the CAMELS components to calculate the weighted average CAMELS rating are 25 percent, 20 percent, 25 percent, 10 percent, 10 percent, and 10 percent for the C, A, M, E, L, and S components, respectively. Further, the Institutions have the following financial ratios and CAMELS ratings: Institution A Institution B Financial Ratios: Leverage Ratio 8.70 7.83 Nonperforming Loans and Leases/Gross 0.43 Assets 0.58 Other Real Estate Owned/Gross Assets 0.80 0.82 Net Income Before Taxes/Total Assets 2.23 2.05 Brokered Deposit Ratio 2.25 2.55 One-Year Asset Growth 6.80 6.15 Loans as a Percent of Total Assets: Construction & Development 0.48 0.38 Commercial & Industrial 14.36 13.80 Leases 1.55 0.65 Other Consumer 18.35 18.05 Loans to Foreign Government 0.40 0.20 Real Estate Loans Residual 0.00 0.00 Multifamily Residential 0.90 0.85 Nonfarm Nonresidential 0.00 0.00 1-4 Family Residential 39.48 36.05 Loans to Depository Banks 1.20 1.60 Agricultural Real Estate 2.55 4.00 Agriculture 4.20 3.20 CAMELS components: C A M E L S 1 2 2 2 1 3 3 3 3 1 2 2 Calculate the initial deposit Insurance assessment rate for each Institution. (Do not round Intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Institution A Institution B Initial assessment rate
Transcribed Image Text:Refer to Table 13-20, Table 13-21, Table 13-23 and Table 13-24. 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. Weights for the CAMELS components to calculate the weighted average CAMELS rating are 25 percent, 20 percent, 25 percent, 10 percent, 10 percent, and 10 percent for the C, A, M, E, L, and S components, respectively. Further, the Institutions have the following financial ratios and CAMELS ratings: Institution A Institution B Financial Ratios: Leverage Ratio 8.70 7.83 Nonperforming Loans and Leases/Gross 0.43 Assets 0.58 Other Real Estate Owned/Gross Assets 0.80 0.82 Net Income Before Taxes/Total Assets 2.23 2.05 Brokered Deposit Ratio 2.25 2.55 One-Year Asset Growth 6.80 6.15 Loans as a Percent of Total Assets: Construction & Development 0.48 0.38 Commercial & Industrial 14.36 13.80 Leases 1.55 0.65 Other Consumer 18.35 18.05 Loans to Foreign Government 0.40 0.20 Real Estate Loans Residual 0.00 0.00 Multifamily Residential 0.90 0.85 Nonfarm Nonresidential 0.00 0.00 1-4 Family Residential 39.48 36.05 Loans to Depository Banks 1.20 1.60 Agricultural Real Estate 2.55 4.00 Agriculture 4.20 3.20 CAMELS components: C A M E L S 1 2 2 2 1 3 3 3 3 1 2 2 Calculate the initial deposit Insurance assessment rate for each Institution. (Do not round Intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Institution A Institution B Initial assessment rate
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Regulation of Commercial Banks
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS