Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
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
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 rating
Institution 1 | Institution 2 | |||||||||||||||||||||||
Tier I leverage ratio (%) | 8.71 | 7.84 | ||||||||||||||||||||||
Loans past due 3089 days/gross assets (%) | 0.54 | 0.65 | ||||||||||||||||||||||
Nonperforming assets/gross assets (%) | 0.44 | 0.59 | ||||||||||||||||||||||
Net loan charge-offs/gross assets (%) | 0.37 | 0.41 | ||||||||||||||||||||||
Net income before taxes/risk-weighted assets (%) | 2.24 | 1.95 | ||||||||||||||||||||||
Adjusted brokered deposits ratio (%) | 0.00 | 15.65 | ||||||||||||||||||||||
CAMELS components: | ||||||||||||||||||||||||
C | 1 | 1 | ||||||||||||||||||||||
A | 1 | 2 | ||||||||||||||||||||||
M | 2 | 1 | ||||||||||||||||||||||
E | 2 | 3 | ||||||||||||||||||||||
L | 2 | 1 | ||||||||||||||||||||||
S | 1 | 1 | ||||||||||||||||||||||
|
Calculate the initial deposit insurance assessment rate for each institution. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.161))
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started