Question
The balance sheet for First Capital Bank is shown below in millions. Assets Liabilities & Equity Cash 170 Deposits 435 Mortgages 227 Repos 253 Consumer
The balance sheet for First Capital Bank is shown below in millions.
Assets | Liabilities & Equity |
Cash 170 | Deposits 435 |
Mortgages 227 | Repos 253 |
Consumer Loans 124 | Commercial Paper 36 |
C&I Loans 139 | Qualified Cumulative Perpetual Preferred Stock 3 |
Residential Property 45 | Retained Earnings 10 |
Securities 55 | Common stock 23 |
TOTAL ASSETS: 760 | TOTAL LIABILITY & EQUITY: 760 |
a) Use the balance sheet to find the total annual premium the FDIC will charge First Capital Bank to insure its deposits. Assume that the bank was classified as supervisory concerned in its last FDIC review. Further, assume deposits are all insured and their tier I and total risk-based capital ratios are: 5.2% and 11% respectively.
b) Suppose First Capital Bank has a tier I risk-based capital ratio, total risk-based capital ratio and leverage ratio of: 4.37% 9.87% and 4.2% respectively. They were classified as substantially supervisory concerned by FDIC evaluators. How much will they have to pay for FIDC insurance over the coming year? (assume deposits remain constant)
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