home / study / business / finance / questions and answers / onshore bank has $38 million in assets, with risk-adjusted...

Your question has been answered

Let us know if you got a helpful answer. Rate this answer

Question: Onshore Bank has $38 million in assets, with risk-...

Bookmark

Onshore Bank has $38 million in assets, with risk-adjusted assets of $28 million. Core Equity Tier 1 (CET1) capital is $1,300,000, additional Tier I capital is $520,000, and Tier II capital is $436,000. The current value of the CET1 ratio is 4.64 percent, the Tier I ratio is 6.5 percent, and the total capital ratio is 8.06 percent.

Calculate the new value of CET1, Tier I, and total capital ratios for the following transactions.

d.	The bank issues $818,000 in common stock and lends it to help finance a new shopping mall. The developer has an A+ credit rating. (Round your answers to 2 decimal places. (e.g., 32.16))

CET1 ratio	%
Tier I ratio	%
Total capital ratio	%

e.	The bank issues $2.8 million in nonqualifying perpetual preferred stock and purchases general obligation municipal bonds. (Round your answers to 2 decimal places. (e.g., 32.16))

CET1 ratio	%
Tier I ratio	%
Total capital ratio	%

f.	Homeowners pay back $5.8 million of mortgages with loan-to-value ratios of 40 percent and the bank uses the proceeds to build new ATMs. (Round your answers to 2 decimal places.(e.g., 32.16))

CET1 ratio	%
Tier I ratio	%
Total capital ratio	%