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56 Cards in this Set
- Front
- Back
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The bank has $3,127,000 at the Federal Reserve Bank.
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Answer: 0%
http://www.fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf RC-R-19 Item No. Caption and Instructions 34 Cash and balances due from depository institutions. Report in column A the amount of cash and balances due from depository institutions reported in Schedule RC, sum of items 1.a and 1.b. In column C–0% risk weight, include the amount of currency and coin reported in Schedule RC, item 1.a; any balances due from Federal Reserve Banks reported in Schedule RC, item 1.b; any balances due from central banks in other OECD countries reported in Schedule RC, items 1.a and 1.b; and the insured portion of deposits in FDIC-insured depository institutions reported in Schedule RC, items 1.a and 1.b. In column F–100% risk weight, include balances due from non-OECD depository institutions with remaining maturities of over one year, all non-local currency claims on non-OECD central banks, and local currency claims on non-OECD central banks that exceed the local cu |
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Cash in the vault and at tellers' stations totals $43,000.
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Answer: 0%
http://www.fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf RC-R-19 Item No. Caption and Instructions 34 Cash and balances due from depository institutions. Report in column A the amount of cash and balances due from depository institutions reported in Schedule RC, sum of items 1.a and 1.b. In column C–0% risk weight, include the amount of currency and coin reported in Schedule RC, item 1.a; any balances due from Federal Reserve Banks reported in Schedule RC, item 1.b; any balances due from central banks in other OECD countries reported in Schedule RC, items 1.a and 1.b; and the insured portion of deposits in FDIC-insured depository institutions reported in Schedule RC, items 1.a and 1.b. In column F–100% risk weight, include balances due from non-OECD depository institutions with remaining maturities of over one year, all non-local currency claims on non-OECD central banks, and local curren |
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The bank has forwarded checks for collection to the Federal Reserve totaling $112,000 that are drawn on other depository institutions for which the reporting bank has not yet received credit.
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Answer: 20%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. a. This category includes short-term claims (including demand deposits) on, and portions of short-term claims that are guaranteed27 by, U.S. depository institutions28 and foreign banks,29 portions of claims collateralized by cash held in a segregated deposit account of the lending bank; cash items in process of collection, both foreign and domestic; |
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The bank has a $10,000 claim on the Internal Revenue Service for tax overpayment.
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Answer: 0%
http://www.fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf RC-R-15 Column C – 0% column: All claims (defined broadly to include securities, loans, and leases) that are direct claims on, or the portion of claims that are directly and unconditionally guaranteed by, the U.S. Government, other OECD central governments, or U.S. Government agencies. |
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The bank has a $1 million depost at Bundesbank, which is Germany's central bank.
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Answer: 0%
http://www.fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf RC-R-19 Item No. Caption and Instructions 34 Cash and balances due from depository institutions. Report in column A the amount of cash and balances due from depository institutions reported in Schedule RC, sum of items 1.a and 1.b. In column C–0% risk weight, include the amount of currency and coin reported in Schedule RC, item 1.a; any balances due from Federal Reserve Banks reported in Schedule RC, item 1.b; any balances due from central banks in other OECD countries reported in Schedule RC, items 1.a and 1.b; and the insured portion of deposits in FDIC-insured depository institutions reported in Schedule RC, items 1.a and 1.b. In column F–100% risk weight, include balances due from non-OECD depository institutions with remaining maturities of over one year, all non-local currency claims on non-OECD central banks, and local currency claims on non-OECD central banks that exceed the local cu |
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$10 million of mortgage-backed securities guaranteed by GNMA.
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Answer: 0%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 a. Category 1--Zero Percent Risk Weight. This category includes cash (domestic and foreign) owned and held in all offices of the bank or in transit; balances due from Federal Reserve banks and central banks in other OECD countries; the portions of local currency claims on or unconditionally guaranteed by non-OECD central governments to the extent that the bank has liabilities booked in that currency; and gold bullion held in the bank's own vaults or in another bank's vaults on an allocated basis, to the extent it is offset by gold bullion liabilities.23 b. The zero percent risk category also includes direct claims24 (including securities, loans, and leases) on, and the portions of claims that are unconditionally guaranteed by, OECD central governments25 and U.S. Government agencies.26 Federal Reserve bank stock also is included in this category. |
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$25 million of US Treasury securities.
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Answer: 0%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 a. Category 1--Zero Percent Risk Weight. This category includes cash (domestic and foreign) owned and held in all offices of the bank or in transit; balances due from Federal Reserve banks and central banks in other OECD countries; the portions of local currency claims on or unconditionally guaranteed by non-OECD central governments to the extent that the bank has liabilities booked in that currency; and gold bullion held in the bank's own vaults or in another bank's vaults on an allocated basis, to the extent it is offset by gold bullion liabilities.23 b. The zero percent risk category also includes direct claims24 (including securities, loans, and leases) on, and the portions of claims that are unconditionally guaranteed by, OECD central governments25 and U.S. Government agencies.26 Federal Reserve bank stock also is included in this category. |
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$15 million of pass-through mortgage-backed securities issued by FHLMC.
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Answer: 20%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. b. This category also includes claims on, or portions of claims guaranteed by, U.S. Government-sponsored agencies;34 and portions of claims (including repurchase agreements) collateralized by securities issued or guaranteed by OECD central governments, U.S. Government agencies, or U.S. Government-sponsored agencies. Also included in the 20 percent risk category are portions of claims that are conditionally guaranteed by OECD central governments and U.S. Government agencies, as well as portions of local currency claims that are conditionally guaranteed by non-OECD central governments to the extent that the bank has liabilities booked in that currency. |
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$1 million of bonds issued by the Tennessee Valley Authority.
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Answer: 20%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. b. This category also includes claims on, or portions of claims guaranteed by, U.S. Government-sponsored agencies;34 and portions of claims (including repurchase agreements) collateralized by securities issued or guaranteed by OECD central governments, U.S. Government agencies, or U.S. Government-sponsored agencies. Also included in the 20 percent risk category are portions of claims that are conditionally guaranteed by OECD central governments and U.S. Government agencies, as well as portions of local currency claims that are conditionally guaranteed by non-OECD central governments to the extent that the bank has liabilities booked in that currency. |
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$3 million of Minneapolis bonds to be repaid from the tax receipts of the city.
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Answer: 20%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. c. General obligation claims on, or portions of claims guaranteed by, the full faith and credit of states or other political subdivisions of the United States or other countries of the OECD-based group are also assigned to this 20 percent risk category.36 In addition, this category includes claims on the International Bank for Reconstruction and Development (World Bank), International Finance Corporation, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the European Investment Bank, the European Bank for Reconstruction and Development, the Nordic Investment Bank, and other multilateral lending institutions or regional development institutions in which the U.S. Government is a shareholder or contributing member, as well as portions of claims guaranteed by such organizations or collateralized by their |
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$5 million of bonds issued by the State of Minnesota to finance a baseball stadium, with a ticket tax established to repay the bonds.
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Answer: 50%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 3--50 Percent Risk Weight. c. This category also includes revenue (non-general obligation) bonds or similar obligations, including loans and leases, that are obligations of states or political subdivisions of the United States or other OECD countries, but for which the government entity is committed to repay the debt with revenues from the specific projects financed, rather than from general tax funds (e.g., municipal revenue bonds). In addition, the credit equivalent amount of derivative contracts that do not qualify for a lower risk weight are assigned to the 50 percent risk category. |
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$500,000 of Federal Reserve Stock.
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Answer: 0%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 a. Category 1--Zero Percent Risk Weight. This category includes cash (domestic and foreign) owned and held in all offices of the bank or in transit; balances due from Federal Reserve banks and central banks in other OECD countries; the portions of local currency claims on or unconditionally guaranteed by non-OECD central governments to the extent that the bank has liabilities booked in that currency; and gold bullion held in the bank's own vaults or in another bank's vaults on an allocated basis, to the extent it is offset by gold bullion liabilities. b. The zero percent risk category also includes direct claims24 (including securities, loans, and leases) on, and the portions of claims that are unconditionally guaranteed by, OECD central governments25 and U.S. Government agencies.26 Federal Reserve bank stock also is included in this category. |
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Also in the securities portfolio, the bank holds $2.5 million in commercial paper issued by Bauer Industries. Ten percent of the security is backed by a financial letter of credit issued by Citibank.
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Answer: $250,000 @ 20%; the rest, $2,250,000 @ 100%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. a. This category includes short-term claims (including demand deposits) on, and portions of short-term claims that are guaranteed27 by, U.S. depository institutions28 and foreign banks,29 portions of claims collateralized by cash held in a segregated deposit account of the lending bank; cash items in process of collection, both foreign and domestic; and long-term claims on, and portions of long-term claims guaranteed by, U.S. depository institutions and OECD banks. Category 4--100 Percent Risk Weight. All assets not included in the categories above in section II.C of this appendix A, except the assets specifically included in the 200 percent category below in section II.C of this appendix A and assets that are otherwise risk weighted in accordance with section II.B.5 of this appendix A, are assigned to |
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$4 million of Federal funds sold to Green Pasture S&L
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Answer: 20%
http://www.fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf RC-R-21 Item No. Caption and Instructions 37 Federal funds sold and securities purchased under agreements to resell. Report in column A the amount of federal funds sold and securities purchased under agreements to resell reported in Schedule RC, sum of items 3.a and 3.b. In column C–0% risk weight, include the portion of Schedule RC, item 3, that is directly and unconditionally guaranteed by U.S. Government agencies or OECD central governments. In column F–100% risk weight, include claims on nondepository institution counterparties that lack qualifying collateral (refer to the risk based capital guidelines for specific criteria) and claims on non-OECD depository institutions with maturities of over one year In column D–20% risk weight, include the amount of federal funds sold and securities resale agreements reported in Schedule RC, item 3, that are not included in columns C and F. |
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$5 million in automobile loans.
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Answer: 100%
http://www.fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf RC-R-22 Item No. Caption and Instructions 39 Loans and leases, net of unearned income. Report in column A the amount of loans and leases, net of unearned income, reported in Schedule RC, item 4.b. In column C–0% risk weight, include the carrying value of the guaranteed portion of SBA loans purchased in the secondary market that are included in Schedule RC-C, part I, items 3, "Loans to finance agricultural production and other loans to farmers," and 4, "Commercial and industrial loans." In column D–20% risk weight, include the carrying value of loans to and acceptances of other depository institutions that are reported in Schedule RC-C, part I, item 2, (excluding the carrying value of any long-term claims on non-OECD banks), plus the carrying value of the guaranteed portion of FHA and VA mortgage loans included in Schedule RC-C, part I, item 1.c.(2)(a), the carrying value of the guaranteed portio |
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$2 million loan to First Team Sports where 50 percent of the loan is secure by cash on deposit at the institution.
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Answer: $1,000,000 @ 20%; $1,000,000 @ 100%
Part 325 Appendix A Category 2--20 Percent Risk Weight. a. This category includes short-term claims (including demand deposits) on, and portions of short-term claims that are guaranteed27 by, U.S. depository institutions28 and foreign banks,29 portions of claims collateralized by cash held in a segregated deposit account of the lending bank; Category 4--100 Percent Risk Weight. All assets not included in the categories above in section II.C of this appendix A, except the assets specifically included in the 200 percent category below in section II.C of this appendix A and assets that are otherwise risk weighted in accordance with section II.B.5 of this appendix A, are assigned to this category, which comprises standard risk assets. The bulk of the assets typically found in a loan portfolio would be assigned to the 100 percent category. |
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$500,000 loan to JB's Pro Shop. the entire loan is secured by Callaway Golf Company commom stock.
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Answer: 100%
http://www.fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf RC-R-22 Item No. Caption and Instructions 39 Loans and leases, net of unearned income. Report in column A the amount of loans and leases, net of unearned income, reported in Schedule RC, item 4.b. In column C–0% risk weight, include the carrying value of the guaranteed portion of SBA loans purchased in the secondary market that are included in Schedule RC-C, part I, items 3, "Loans to finance agricultural production and other loans to farmers," and 4, "Commercial and industrial loans." In column D–20% risk weight, include the carrying value of loans to and acceptances of other depository institutions that are reported in Schedule RC-C, part I, item 2, (excluding the carrying value of any long-term claims on non-OECD banks), plus the carrying value of the guaranteed portion of FHA and VA mortgage loans included in Schedule RC-C, part I, item 1.c.(2)(a), the carrying value of the guaranteed portio |
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$25 million in converntional mortgage loans on 1 to 4 family residential properties; of this total, $750,000 are past due 90 days or more.
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Answer: $24,250,000 @ 50%; $750,000 @ 100%
http://www.fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf RC-R-22 39 Loans and leases, net of unearned income. Report in column A the amount of loans and leases, net of unearned income, reported in Schedule RC, item 4.b. In column C–0% risk weight, include the carrying value of the guaranteed portion of SBA loans purchased in the secondary market that are included in Schedule RC-C, part I, items 3, "Loans to finance agricultural production and other loans to farmers," and 4, "Commercial and industrial loans." In column D–20% risk weight, include the carrying value of loans to and acceptances of other depository institutions that are reported in Schedule RC-C, part I, item 2, (excluding the carrying value of any long-term claims on non-OECD banks), plus the carrying value of the guaranteed portion of FHA and VA mortgage loans included in Schedule RC-C, part I, item 1.c.(2)(a), the carrying value of the guaranteed portion |
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$1.5 million in FHA/VA mortgage loans that are conditionally guaranteed.
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Answer: 20%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. b. This category also includes claims on, or portions of claims guaranteed by, U.S. Government-sponsored agencies; and portions of claims (including repurchase agreements) collateralized by securities issued or guaranteed by OECD central governments, U.S. Government agencies, or U.S. Government-sponsored agencies. Also included in the 20 percent risk category are portions of claims that are conditionally guaranteed by OECD central governments and U.S. Government agencies, as well as portions of local currency claims that are conditionally guaranteed by non-OECD central governments to the extent that the bank has liabilities booked in that currency. RC-R-22 http://fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf 39 Loans and leases, net of unearned income. In column D–20% risk weight, include the carrying value of |
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$1 million loan secured by a 20-unit apartment building, having a loan-to-value of 70%.
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Answer: 50%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 3--50 Percent Risk Weight. b. This category also includes loans fully secured by first liens on multifamily residential properties,40 provided that: (1) The loan amount does not exceed 80 percent of the value41 of the property securing the loan as determined by the most current appraisal or evaluation, whichever may be appropriate (75 percent if the interest rate on the loan changes over the term of the loan); (2) For the property's most recent fiscal year, the ratio of annual net operating income generated by the property (before payment of any debt service on the loan) to annual debt service on the loan is not less than 120 percent (115 percent if the interest rate on the loan changes over the term of the loan) or in the case of a property owned by a cooperative housing corporation or nonprofit organization, the property generates sufficient cash flow to provi |
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$4 million of home equity loans secured by second mortgages. Of this total, the Muny State Bank has extended $1 million of home equity loans to its own first mortgage customers.
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Answer: $1,000,000 @ 50%; $3,000,000 @ 100%
Unable to locate support for this answer but it appears this is the correct risk-weighted treatment. |
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$30 million in other loans.
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Answer: 100%
http://www.fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf RC-R-22 Item No. Caption and Instructions 39 Loans and leases, net of unearned income. In column F–100% risk weight, include the carrying value of loans reported in Schedule RC, item 4.b, that is not included in columns B through E. |
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The book value of premises and fixed assets totals $3.5 million.
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Answer: 100%
Part 325 Appendix A http://fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 4--100 Percent Risk Weight. All assets not included in the categories above in section II.C of this appendix A, except the assets specifically included in the 200 percent category below in section II.C of this appendix A and assets that are otherwise risk weighted in accordance with section II.B.5 of this appendix A, are assigned to this category, which comprises standard risk assets. The bulk of the assets typically found in a loan portfolio would be assigned to the 100 percent category. (b) This category includes: (1) Long-term claims on, and the portions of long-term claims that are guaranteed by, non-OECD banks, and all claims on non-OECD central governments that entail some degree of transfer risk;43 (2) All claims on foreign and domestic private-sector obligors not included in the categories above in section II.C of this appendix A (including loans to nondepos |
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Goodwill totaling $300,000.
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Answer: 100%
RC-R-22b http://fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf 42 All other assets. In column F–100% risk weight, include the amount of all other assets reported in column A that is not included in columns B through E. However, for residual interests in asset securitizations (other than credit-enhancing interest-only strips) included in Schedule RC, item 11, include the amortized cost of those that are rated in the lowest investment grade category, e.g., BBB, and the amortized cost multiplied by 2 of those that are rated one category below investment grade, e.g., BB. Part 325 Category 4—100 Percent Risk Weight (1) All other claims on private obligors. (2) Claims on, or guaranteed by, non-OECD banks with a remaining maturity exceeding one year. (3) Claims on non-OECD central governments that are not included in item 4 of category 1 or item 3 of category 2, and all claims on non-OECD state and local governments. (4) Obligations issued b |
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The book value of mortgage servicing rights totals $1 million. The most recent dicsounted cash flow analysis values the MSRs at $1 million.
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Answer: 100%
RC-R-22b http://fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf 42 All other assets. In column F–100% risk weight, include the amount of all other assets reported in column A that is not included in columns B through E. However, for residual interests in asset securitizations (other than credit-enhancing interest-only strips) included in Schedule RC, item 11, include the amortized cost of those that are rated in the lowest investment grade category, e.g., BBB, and the amortized cost multiplied by 2 of those that are rated one category below investment grade, e.g., BB. Part 325 Category 4—100 Percent Risk Weight (1) All other claims on private obligors. (2) Claims on, or guaranteed by, non-OECD banks with a remaining maturity exceeding one year. (3) Claims on non-OECD central governments that are not included in item 4 of category 1 or item 3 of category 2, and all claims on non-OECD state and local governments. (4) Obligations issued by U. |
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$500,000 of cash items in the process of collection.
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Answer: 20%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. (1) Cash items in the process of collection. |
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$15 million in home loans guaranteed by Bank of America.
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Answer: 20%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. (1) Cash items in the process of collection. (2) All claims (long- and short-term) on, and portions of claims (long- and short-term) guaranteed by, U.S. depository institutions and OECD banks. |
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$650,000 in commercial RE loans guaranteed by SBA.
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Answer: 20%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. (1) Cash items in the process of collection. (2) All claims (long- and short-term) on, and portions of claims (long- and short-term) guaranteed by, U.S. depository institutions and OECD banks. (3) Short-term (remaining maturity of one year or less) claims on, and portions of short-term claims guaranteed by, non-OECD banks. (4) Portions of loans and other claims conditionally guaranteed by the U.S. Treasury, U.S. Government agencies, or central governments in other OECD countries and portions of local currency claims conditionally guaranteed by non-OECD central governments to the extent that the bank has liabilities booked in that currency. |
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$950,000 of bonds guaranteed by FHLB.
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Answer: 20%
Part 325 Appendix A http://www.fdic.gov/regulations/laws/rules/2000-4600.html#fdic2000appendixatopart325 Category 2--20 Percent Risk Weight. (1) Cash items in the process of collection. (2) All claims (long- and short-term) on, and portions of claims (long- and short-term) guaranteed by, U.S. depository institutions and OECD banks. (3) Short-term (remaining maturity of one year or less) claims on, and portions of short-term claims guaranteed by, non-OECD banks. (4) Portions of loans and other claims conditionally guaranteed by the U.S. Treasury, U.S. Government agencies, or central governments in other OECD countries and portions of local currency claims conditionally guaranteed by non-OECD central governments to the extent that the bank has liabilities booked in that currency. (5) Securities and other claims on, and portions of claims guaranteed by, U.S. Government-sponsored agencies. |
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$2 million in performance bonds issued by the City of St. Paul to be repaid by 3M.
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Answer: 100%
Part 325 Appendix A Category 4—100 Percent Risk Weight (1) All other claims on private obligors. (2) Claims on, or guaranteed by, non-OECD banks with a remaining maturity exceeding one year. (3) Claims on non-OECD central governments that are not included in item 4 of category 1 or item 3 of category 2, and all claims on non-OECD state and local governments. (4) Obligations issued by U.S. state or local governments or other OECD local governments (including industrial development authorities and similar entities) that are repayable solely by a private party or enterprise. |
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$3 million in non-investment grade mortgage-backed securities issued by Wells Fargo.
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Answer: 200% (enter into Column B at 2 times the volume shown)
Part 325 Apendix A Category 5—200 Percent Risk Weight. (1) Externally rated recourse obligations, direct credit substitutes, residual interests (other than credit-enhancing interest-only strips), and asset- and mortgage-backed securities that are rated one category below the lowest investment grade category, e.g., "BB" |
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$150,000 in credit-enhancing interest-only strips that have not been deducted from Tier 1 capital and assets.
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Answer: 200% (enter into Column B at 2 times the volume shown)
RC-R-16b http://fdic.gov/regulations/resources/call/crinst/2011-03/311RC-R033111.pdf Balance Sheet Asset Categories Assets Sold with Recourse and Purchased Credit-Enhancing Interest-Only Strips – When an on-balance sheet asset that is a position in an asset securitization or structured finance program qualifies for the ratings-based approach, the asset should be reported in the appropriate asset category in Schedule RC-R (items 34 to 42) and risk-weighted 20%, 50%, 100%, or 200% according to its rating. (See the paragraph below for further information on assets subject to a 200% risk weight.) Otherwise, in an asset sale with recourse in which a bank has retained on-balance sheet assets that act as credit enhancements (including retained credit-enhancing interest-only strips) that do not qualify for the ratings-based approach, these assets should be reported in column B, "Items Not Subject to Risk-Weighting," of the appropriate Schedule |
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What is the credit conversion factor for a $10 million standby letter of credit backing general obligation bonds of the State of Minnesota?
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Answer: 100%
RC-R-2 Credit Conversion Factors for Off-Balance Sheet Items – A summary of the credit conversion factors follows. For further information on these factors, refer to the risk-based capital guidelines. Off-balance sheet items subject to a 100 percent conversion factor: (1) Direct credit substitutes, including general guarantees of indebtedness and guarantee -type instruments, such as financial standby letters of credit. For extra credit, what risk-weight category does the letter of credit belong in? (20%) |
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What is the credit conversion factor for the unused portion of $25 million in credit card commitments that are outstanding for 2 more years if the bank has the right to cancel the line as appropriate?
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Answer: 0%
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What is the credit conversion factor for $3 million of unadvanced HELOCs to non-customers with original maturities of 5 years?
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Answer: 50%
For extra credit, what risk-weight category do the HELOCs belong in? (100%) |
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What risk-weight category does a $10 million standby letter of credit backing general obligation bonds of the State of Minnesota belong to?
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Answer: 20%
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What risk-weight category do $3 million of unadvanced HELOCs to non-customers belong in?
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Answer: 100%
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What is the credit conversion factor for a 5-year commitment, that is not unconditionally cancelable, to the Bank of Brian Steele to purchase $3 million of loan participations secured by FHLB securities?
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Answer: 50%
For extra credit, what risk-weight category does the commitment belong in? (20%) |
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What risk-weight category does a $3 million commitment to purchase participations in loans backed by FHLB securities from another bank belong in?
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Answer: 20%
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What is the credit conversion factor for a $2 million standby letter of credit pledged for sewer installation to Messier Township for a new development?
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Answer: 50% (standby letters of credit are a secondary source of payment or performance)
For extra credit, what risk-weight category does the $2 million letter of credit belong in? (100%) And therefore, what is the amount to add to the 100% category? ($1 million) |
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What is the risk-weight category for a $2 million letter of credit for sewer installation in a new development in Messier Township?
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Answer: 100%
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What is the credit conversion factor for a $1 million letter of credit to Maxfli, Inc., a golf ball exporter, on behalf of a customer, Manion Enterprises?
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Answer: 20% (commercial letters of credit substitute the credit of the bank for the credit of the customer)
For extra credit, what risk-weight category doe the $1 million letter of credit belong in? (100%) |
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What is the risk-weight category for a $1 million commercial letter of credit to Maxfli, Inc. for a golf ball exporter, Manion Enterprises?
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Answer: 100%
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What is the conversion factor for the unused portion of a commitment with an original maturity of one year or less?
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Answer: 0%
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What is the amount of $2 million in qualifying subordinated debt with an original maturity of 10 years with $1 million due in in three years six months, and $1 million due in four years and six months.
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Answer: $1.4 million (5 years or more = 100%, 4-5 years = 80%, 3-4 years = 60%, 2-3 years = 40%, 1-2 years = 20%)
For cheap extra credit, what is the amount of qualified subordinated debt maturing in less than one year? (0%) |
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What is the limit on qualifying subordinated debt in Tier 2 capital?
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Answer: Cannot exceed 50% of Tier 1 capital. Also, must have original maturity of at least 5 years, must be unsecured, and holder cannot have option to redeem.
Part 325 Appendix A Term subordinated debt and intermediate-term preferred stock (original weighted average maturity of five years or more) are limited to 50% of Tier 15 and amortized for capital purposes as they approach maturity. |
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What is the eligible portion of MSRs (mortgage servicing rights) in Tier 1 capital?
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Answer: The lesser of book value or 90% of FMV.
Does this get added to Tier 1? No, the disallowed portion gets subtracted from Tier 1. |
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What is the conversion factor for performance standby letters of credit, e.g. completing a sewer system in a development?
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Answer: 50%
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What is the conversion factor for financial standby letters of credit, e.g. a letter of credit backing a State of MN GO bond issue?
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Answer: 100%
RC-R-23 45. Performance standby letters of credit. In column B, report 50 percent of the face amount reported in column A. |
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What is the conversion factor for commercial and similar letters of credit?
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Answer: 20%
RC-R-23 46. Commercial and similar letters of credit. In column B, report 20 percent of the face amount reported in column A. |
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List at least three purposes for capital.
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1) Absorb losses
2) Promote public confidence 3) Restrict excessive asset growth 4) Protect depositors and the Fund 5) Gives management time to adjust to a changing environment |
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What are the 5 main components of core capital (aka Equity capital)
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1) Perpetual preferred stock (noncumulative)
2) Common stock 3) Surplus (aka Additional Paid-in Capital) 4) Retained earnings (aka Undivided Profits) 5) Capital reserves (aka accumulated other comprehensive income and other equity capital components) |
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List the primary intangible assets found on a bank's balance sheet.
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1) Goodwill
2) Mortgage Servicing Rights 3) Core deposit intangibles |
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Which intangible assets are disallowed for Tier 1 capital?
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1) Goodwill
2) Core deposit intangibles |
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What is the limit on Mortgage Servicing Rights (MSRs) in Tier 1 capital?
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The lesser of 90% of FMV or book value.
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What is the conversion factor for unused commitments with an original maturity exceeding 1 year (HELOCs)
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Answer: 50%
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