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:

Institution A

Institution B

Tier I leverage ratio (%) 8.25 8.50 Net income before taxes/risk-weighted assets

(%) 2.15 1.85 Nonperforming loans and leases/gross assets

(%) 0.25 0.55 Other real estate–owned/gross assets (%) 0.54 0.75 Brokered deposits/total assets (%) 1.05 3.75 One year asset growth 5.66 7.75 Loans as a Percentage of Total Assets:

Construction and Development 0.00 0.00 Commercial and Industrial 11.35 15.66 Leases 0.45 1.05 Other Consumer 16.50 16.80 Loans to Foreign Government 0.00 0.60 Real Estate Loans Residual 0.00 0.00 Multifamily Residential 0.50 1.25 Nonfarm Nonresidential 0.00 0.00 1–4 Family Residential 38.85 40.15 Loans to Depository Banks 0.00 2.80 Agricultural Real Estate 4.55 0.00 Agricultural 7.40 0.00 CAMELS Components:

C 1 1 A 2 2 M 1 2 E 2 3 L 1 1 S 2 1 The DIF reserve ratio is currently 1.30 percent. Calculate the initial deposit insurance assessment for each institution.

 LO.1