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: Use Table 13–11. Institution AInstitution BTier I leverage ratio (%) 8.80 7.93 Net income before taxes/risk-weighted assets (%) 2.33 1.95 Nonperforming loans and leases/gross assets (%) 0.53 0.68 Other real estate owned/gross assets (%) 0.15 0.45 Brokered deposits/total assets (%) 3.75 1.05 One year asset growth 7.35 4.65 Loans as a Percentage of Total Assets: Construction & Development 0.00 0.00 Commercial & Industrial 18.36 11.40 Leases 2.05 1.75 Other Consumer 18.85 18.55 Loans to Foreign Government 0.30 0.30 Real Estate Loans Residual 0.00 0.00 Multifamily Residential 0.95 0.65 Nonfarm Nonresidential 0.00 0.00 1–4 Family Residential 38.40 36.34 Loans to Depository Banks 2.70 0.95 Agricultural Real Estate 1.30 4.05 Agricultural 0.40 7.20 CAMELS components: C 2 2 A 2 3 M 1 2 E 2 2 L 1 3 S 2 1 The DIF reserve ratio is currently 1.30 percent. Calculate the initial deposit insurance assessment rate for each institution. TABLE 13–11 CAMELS Component WeightsCAMELS ComponentWeightC25%A20M25E1010S10Source: FDIC, Federal Register, May 20, 2016. www.fdic.gov

Loan is an important term in accounting and most probably banking world as it is the primary source…

Answered: TABLE 13–11 CAMELS Component Weights…

Accounting Information Systems

11th Edition

ISBN:9781337552127

Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill

Publisher:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill

Chapter15: Integrated Production Processes (ipps)

Section: Chapter Questions

Problem 5DQ

See similar textbooks

Related questions

Concept explainers

Question

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: Use Table 13–11.

	Institution A	Institution B
Tier I leverage ratio (%)		8.80	7.93
Net income before taxes/risk-weighted assets (%)		2.33	1.95
Nonperforming loans and leases/gross assets (%)		0.53	0.68
Other real estate owned/gross assets (%)		0.15	0.45
Brokered deposits/total assets (%)		3.75	1.05
One year asset growth		7.35	4.65

Loans as a Percentage of Total Assets:
Construction & Development		0.00	0.00
Commercial & Industrial		18.36	11.40
Leases		2.05	1.75
Other Consumer		18.85	18.55
Loans to Foreign Government		0.30	0.30
Real Estate Loans Residual		0.00	0.00
Multifamily Residential		0.95	0.65
Nonfarm Nonresidential		0.00	0.00
1–4 Family Residential		38.40	36.34
Loans to Depository Banks		2.70	0.95
Agricultural Real Estate		1.30	4.05
Agricultural		0.40	7.20

CAMELS components:
C		2	2
A		2	3
M		1	2
E		2	2
L		1	3
S		2	1

The DIF reserve ratio is currently 1.30 percent. Calculate the initial deposit insurance assessment rate for each institution.

TABLE 13–11 CAMELS Component Weights
CAMELS Component
Weight
C
25%
A
20
M
25
E
10
10
S
10
Source: FDIC, Federal Register, May 20, 2016. www.fdic.gov

Expert Solution

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions