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
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
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Bhupatbhai
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
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