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    Tier 1 capital/TA (Tier 1+tier 2) /TA Tier 1 capital/RWA Including OBS Items (Tier 1+tier 2) /RAW Including OBS Items

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    Thảo Đỗ
    - Thyme National Bank has total assets of $92 million and risk-weighted assets including off-balance sheet items of $85.5 million. - Its Tier 1 capital is $4.75 million and Tier 2 capital is $2.5 million. - The bank meets the Basel I requirement of having a minimum capital to risk-weighted assets ratio of at least 8%. It falls into the adequately capitalized category and is subject to restrictions on accepting broker placed deposits without regulatory approval.

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    Tier 1 capital/TA (Tier 1+tier 2) /TA Tier 1 capital/RWA Including OBS Items (Tier 1+tier 2) /RAW Including OBS Items

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    Thảo Đỗ
    17 views10 pages
    - Thyme National Bank has total assets of $92 million and risk-weighted assets including off-balance sheet items of $85.5 million. - Its Tier 1 capital is $4.75 million and Tier 2 capital is $2.5 million. - The bank meets the Basel I requirement of having a minimum capital to risk-weighted assets ratio of at least 8%. It falls into the adequately capitalized category and is subject to restrictions on accepting broker placed deposits without regulatory approval.

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    BMA-tut-8

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    - Thyme National Bank has total assets of $92 million and risk-weighted assets including off-balance sheet items of $85.5 million. - Its Tier 1 capital is $4.75 million and Tier 2 capital is $2.5 million. - The bank meets the Basel I requirement of having a minimum capital to risk-weighted assets ratio of at least 8%. It falls into the adequately capitalized category and is subject to restrictions on accepting broker placed deposits without regulatory approval.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    17 views10 pages

    Tier 1 capital/TA (Tier 1+tier 2) /TA Tier 1 capital/RWA Including OBS Items (Tier 1+tier 2) /RAW Including OBS Items

    Uploaded by

    Thảo Đỗ
    - Thyme National Bank has total assets of $92 million and risk-weighted assets including off-balance sheet items of $85.5 million. - Its Tier 1 capital is $4.75 million and Tier 2 capital is $2.5 million. - The bank meets the Basel I requirement of having a minimum capital to risk-weighted assets ratio of at least 8%. It falls into the adequately capitalized category and is subject to restrictions on accepting broker placed deposits without regulatory approval.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 10

    Total assets $92 mil

    RWA including OBS items $85.50 mil


    Tier 1 Capital $4.75 mil
    Tier 2 Capital $2.50 mil

    Leverage ratio 5.16% Tier 1 capital/TA


    Total capital-to-total assets ratio 7.88% (Tier 1+Tier 2)/TA
    Core capital-to-total RWA 5.56% Tier 1 capital/RWA including OBS items
    Total capital-to-total RWA 8.48% (Tier 1+Tier 2)/RAW including OBS items

    Thyme National Bank meet the Basel I requirement of having a minimum ratio of capital to RWA of at least 8%
    - Thyme National Bank falls in adequately capitalized category among the five capital aquadecy categories creat
    -Thyme National Bank is subject to a regulatory restriction of not accepting broker placed deposits with regulator
    capital to RWA of at least 8%, a ratio of Tier 1 capital to RWA of at least 4% stipulated for a bank to qualify as adequately c
    ital aquadecy categories created by US federal regulators for PCA purposes.
    placed deposits with regulatory approval.
    o qualify as adequately capitalized.
    On-Balance-Sheet Items (Assets) RW RWA Off-Balance-Sheet Items
    Cash $4.5 mil 0% $0.0 Standby letters of credit
    U.S.Treasury securities $25.6 0% $0.0 Long-term unused loan
    Deposit balances due from other banks $4.0 20% $0.8 Total off-balance-sheet items
    Loans secured by first liens on $50.8 50% $25.4 Tier 1 Capital
    Loans to corporations $105.3 100% $105.3 Tier 2 Capital
    Total assets $190.2 Total Off BS RWA
    Total OnBS RWA $131.5
    Total RWA $150.3
    Tier 1 CAR 4.99% Tier1 Cap/Total RWA
    CAR 8.85% Total capital/Total RWA
    ce-Sheet Items CCF RW
    etters of credit $17.5 mil 1 20% $3.50
    m unused loan $30.5 0.5 100% $15.25
    balance-sheet items $48.0
    $7.5
    $5.8
    $18.75
    OnBS items CCF RW RWA
    Cash $115 mil 0% $0
    Domestic interbank deposits $130 20% $26
    U.S. government securities $250 0% $0
    Residential real estate loans $450 50% $225
    Commercial loans $520 100% $520
    Total assets $1,465
    Total liabilities $1,350
    Total capital $115

    OffBS items
    Standby credit letters that back municipal $87 1 20% $17.40
    general obiligation bonds
    Long-term unused loan commitments to $145 0.5 100% $72.50
    private companies
    Total RWA $861
    CAR 13.36% Total cap/total RWA
    does not appear to have a capital deficiency
    Sale of Common Stock Sale of 9% Preferref
    at $25 per share stock at $12 per share
    Operating Revenues $180,000,000 $180,000,000
    Operating Expenses $151,000,000 $151,000,000
    Net Revenues $29,000,000 $29,000,000
    Interest on capital notes
    Before-tax income $29,000,000 $29,000,000
    After-tax income $19,140,000 $19,140,000
    Preferred stock dividends $720,000
    Net income for common stockholders $19,140,000 $18,420,000
    Shares of common stock outstanding 5720000 $5,400,000
    EPS of common stock $3.35 $3.41

    If operating revenue rose to $224 million the situation would be following:


    Sale of Common Stock Sale of 9% Preferref
    at $25 per share stock at $12 per share
    Operating Revenues $225,000,000 $225,000,000
    Operating Expenses $182,500,000 $182,500,000
    Net Revenues $42,500,000 $42,500,000
    Interest on capital notes
    Before-tax income $42,500,000 $42,500,000
    After-tax income $28,050,000 $28,050,000
    Preferred stock dividends $720,000
    Net income for common stockholders $28,050,000 $27,330,000
    Shares of common stock outstanding $5,720,000 $5,400,000
    EPS of common stock $4.90 $5.06
    And again the capital notes would be the best option, although the preferred stock comes closer this time.

    If operating revenues drop to $110 million the situation would be the following:
    Sale of Common Stock Sale of 9% Preferref
    at $25 per share stock at $12 per share
    Operating Revenues $110,000,000 $110,000,000
    Operating Expenses $102,000,000 $102,000,000
    Net Revenues $8,000,000 $8,000,000
    Interest on capital notes
    Before-tax income $8,000,000 $8,000,000
    After-tax income $5,280,000 $5,280,000
    Preferred stock dividends 720000
    Net income for common stockholders $5,280,000 $4,560,000
    Shares of common stock outstanding $5,720,000 $5,400,000
    EPS of common stock $0.92 $0.84

    =>In this case issuing the common stock is the best alternative from the point of view of the common stock
    f 9% Preferref Sale of 10% Capital
    at $12 per share Notes
    $180,000,000
    $151,000,000
    $29,000,000
    $800,000
    $28,200,000
    $18,612,000

    $18,612,000
    $5,400,000
    $3.45

    f 9% Preferref Sale of 10% Capital


    at $12 per share Notes
    $225,000,000
    $182,500,000
    $42,500,000
    $800,000
    $41,700,000
    $27,522,000

    $27,522,000
    $5,400,000
    $5.10
    stock comes closer this time.

    f 9% Preferref Sale of 10% Capital


    at $12 per share Notes
    $110,000,000
    $102,000,000
    $8,000,000
    $800,000
    $7,200,000
    $4,752,000

    $4,752,000
    $5,400,000
    $0.88

    nt of view of the common stockholders

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