TABLE 13–11 CAMELS Component Weights CAMELS Component Weight C 25% A 20 M 25 E 10 10 S 10 Source: FDIC, Federal Register, May 20, 2016. www.fdic.gov

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Chapter5: Operating Activities: Purchases And Cash Payments
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Problem 1.10C
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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: Use Table 13–11.
 

  Institution A Institution B
Tier I leverage ratio (%)   8.80     7.93  
Net income before taxes/risk-weighted assets (%)   2.33     1.95  
Nonperforming loans and leases/gross assets (%)   0.53     0.68  
Other real estate owned/gross assets (%)   0.15     0.45  
Brokered deposits/total assets (%)   3.75     1.05  
One year asset growth   7.35     4.65  
             
Loans as a Percentage of Total Assets:            
Construction & Development   0.00     0.00  
Commercial & Industrial   18.36     11.40  
Leases   2.05     1.75  
Other Consumer   18.85     18.55  
Loans to Foreign Government   0.30     0.30  
Real Estate Loans Residual   0.00     0.00  
Multifamily Residential   0.95     0.65  
Nonfarm Nonresidential   0.00     0.00  
1–4 Family Residential   38.40     36.34  
Loans to Depository Banks   2.70     0.95  
Agricultural Real Estate   1.30     4.05  
Agricultural   0.40     7.20  
             
CAMELS components:            
C   2     2  
A   2     3  
M   1     2  
E   2     2  
L   1     3  
S   2     1  
 

 
The DIF reserve ratio is currently 1.30 percent. Calculate the initial deposit insurance assessment rate for each institution.

TABLE 13–11 CAMELS Component Weights
CAMELS Component
Weight
C
25%
A
20
M
25
E
10
10
S
10
Source: FDIC, Federal Register, May 20, 2016. www.fdic.gov
Transcribed Image Text:TABLE 13–11 CAMELS Component Weights CAMELS Component Weight C 25% A 20 M 25 E 10 10 S 10 Source: FDIC, Federal Register, May 20, 2016. www.fdic.gov
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