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Financial Institutions Management (8th Edition) Chapter 19, Problem 29QP Webb Bank has a composite CAMELS rating...

Financial Institutions Management (8th Edition) Chapter 19, Problem 29QP

Webb Bank has a composite CAMELS rating of 2, a total risk-based capital ratio of 10.2 percent, a Tier I risk-based capital ratio of 5.2 percent, and a Tier I leverage ratio of 4.8 percent. What deposit insurance risk category does the bank fall into, and what is the bank's deposit insurance assessment rate?

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Answer #1

With the subsequent CAMELS rating and the capital ratio, Webb Bank is clustered into the Category II risk. The bank has a deposit insurance valuation rate of 0.26 cents per $100 deposit. (Total risk based > 8%, Tier 1 risk based > 4%, Tier 1 leverage > 4%) . This means it is “Adequately capitalized.”

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