Two depository institutions have composite CAMELS ratings of 1 or 2 and are \"we

Question

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 rations and CAMELS ratings:

Calculate the initial deposit insurance assessment for each institution. Please show your work in Excel.

Institution A Institution B Tier 1 Leverage Ratio (%) 8.62 7.75 Loans Past Due 30-89 days/gross assets (%) 0.45 0.56 Nonperforming assets/gross assets (%) 0.35 0.5 Net Loan Charge-offs/gross assets (%) 0.28 0.32 Net Income Before Taxes/risk-weighted assets (%) 2.15 1.86 Adjusted brokered deposits ratio (%) 0.00 15.56 CAMELS Components: C 1 1 A 2 2 M 1 2 E 2 3 L 1 1 S 2 1

Explanation / Answer

Initial Base Assessment Rates for Two Institutions

As both institutions have contribution rates above the minimum assessment rate of 12 and maximum assessment rate of 16 for Risk category I, the contribution rates become the assessment rate for the particular institution.

Risk Category Supervisory Group Capital group A B C Well Capitalized I II III Adequately capitalized II II III Undercapitalized III III IV

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