Answered step by step
Verified Expert Solution
Question
1 Approved Answer
a-f need anawers Onshore Bank has $27 million in assets, with risk-weighted assets of $17 million Core Equity Tier 1 (CET1) capital is $800,000, additional
a-f need anawers
Onshore Bank has $27 million in assets, with risk-weighted assets of $17 million Core Equity Tier 1 (CET1) capital is $800,000, additional Tier I capital is $230,000, and Tier II capital is $414,000. The current value of the CET1 ratio is 4.71 percent, the Tier I ratio is 6.06 percent, and the total capital ratio is 8.49 percent. Calculate the new value of CET1, Tier I, and total capital ratios for the following transactions. a. The bank repurchases $107,000 of common stock with cash. b. The bank issues $2.7 million of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 70 percent c. The bank receives $507,000 in deposits and invests them in T-bills. d. The bank issues $807,000 in common stock and lends it to help finance a new shopping mall. The developer has an At credit rating e. The bank issues $1.7 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. f. Homeowners pay back $4.7 million of mortgages with loan-to-value ratios of 50 percent and the bank uses the proceeds to build new ATMs Complete this question by entering your answers in the tabs below. Required A Required Required Required D Required E Required F The bank repurchases $107,000 of common stock with cash. (Round your percentage answers to 2 decimal places. (eg, 32.16)) CET1 ratio Tierrato Total capital ratio 4.08% 5.43 % 7.86% BA Required B > Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started