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 1			Institution 2
Tier I leverage ratio (%)		8.79			7.92
Loans past due 3089 days/gross assets (%)		0.62			0.73
Nonperforming assets/gross assets (%)		0.52			0.67
Net loan charge-offs/gross assets (%)		0.45			0.49
Net income before taxes/risk-weighted assets (%)		2.32			2.03
Adjusted brokered deposits ratio (%)		0.00			15.73
CAMELS components:
C		1			3
A		1			2
M		1			1
E		3			3
L		1			1
S		1			3

	Pricing Multiplier
Uniform Amount	4.861
Tier I leverage ratio (%)	(0.056)
Loans past due 30-89 days/gross assets (%)	0.575
Nonperforming assets/gross assets (%)	1.074
Net loan charge-offs/gross assets (%)	1.210
Net income before taxes/risk-weighted assets (%)	(0.764)
Adjusted brokered deposits ratio (%)	0.065
Weighted average CAMELS component ratings	1.095

Calculate the initial deposit insurance assessment rate for each institution

Institution 1

Institution 2

Initial assessment rate=

What is the contribution to the asset base of the following items under the Basel III requirements? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers in dollars not in millions.)

a.	$9 million cash reserves.
b.	$48 million 91-day U.S. Treasury bills.
c.	$24 million cash items in the process of collection.
d.	$5 million U.K. government bonds, OECD CRD rated 1.
e.	$5 million French short-term government bonds, OECD CRD rated 2.
f.	$2 million general obligation bonds.
g.	$10 million repurchase agreements (against U.S. Treasuries).
h.	$4 million loan to foreign bank, OECD rated 3.
i.	$480 million 1-4 family home mortgages, category 1, loan-to-value ratio 80%.
j.	$9 million 1-4 family home mortgages, category 2, loan-to-value ratio 95%.
k.	$5 million 1-4 family home mortgages, 100 days past due.
l.	$480 million commercial and industrial loans, AAA rated.
m.	$480 million commercial and industrial loans, B- rated.
n.	$200,000 performance-related standby letters of credit to a AAA rated corporation.
o.	$200,000 performance-related standby letters of credit to a municipality issuing general obligation bonds.
p.	$6 million commercial letter of credit to a foreign bank, OECD CRC rated 2.
q.	$3 million five-year loan commitment to a foreign government, OECD CRC rated 1.
r.	$10 million bankers acceptance conveyed to a U.S., AA rated corporation.
s.	$16 million three-year loan commitment to a private agent.
t.	$16 million three-month loan commitment to a private agent.
u.	$32 million standby letter of credit to back an A rated corporate issue of commercial paper.
v.	$8 million five-year interest rate swap with no current exposure.
w.	$5 million two-year currency swap with $400,000 current exposure.

Basel III Asset Base

a.

$

b.

c.

d.

e.

f.

g.

h.

i.

j.

k.

l.

m.

n.

o.

p.

q.

r.

s.

t.

u.

v.

w.

Onshore Bank has $31 million in assets, with risk-adjusted assets of $21 million. Core Equity Tier 1 (CET1) capital is $1,050,000, additional Tier I capital is $270,000, and Tier II capital is $422,000. The current value of the CET1 ratio is 5 percent, the Tier I ratio is 6.29 percent, and the total capital ratio is 8.3 percent.

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

a.	The bank repurchases $111,000 of common stock with cash. (Round your answers to 2 decimal places. (e.g., 32.16))

CET1 ratio	%
Tier I ratio	%
Total capital ratio	%

b.	The bank issues $3.1 million of CDs and uses the proceeds to issue category 1 mortgage loans with a loan-to-value ratio of 70 percent. (Round your answers to 2 decimal places. (e.g., 32.16))

CET1 ratio	%
Tier I ratio	%
Total capital ratio	%

c.	The bank receives $511,000 in deposits and invests them in T-bills. (Round your answers to 2 decimal places. (e.g., 32.16))

CET1 ratio	%
Tier I ratio	%
Total capital ratio	%

d.	The bank issues $811,000 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 $2.1 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 $5.1 million of mortgages with loan-to-value ratios of 50 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	%