FDIC TE – Capital: Questions With Expert Solutions

FDIC TE – Capital: Questions With Expert Solutions

What are the capital requirements for a well-capitalized institution under the
PCA categories? (Total RBC, T1 RBC, CET1 RBC, T1LC ratios) Correct
Answer - Total RBC- >= 10%
T1 RBC- >= 8%
CET1 RBC- >= 6.5%
T1LC ratio- >= 5%

What are the capital requirements for an adequately-capitalized institution
under the PCA categories? (Total RBC, T1 RBC, CET1 RBC, T1LC ratios)
Correct Answer - Total RBC- >= 8%
T1 RBC- >= 6%
CET1 RBC- >= 4.5%
T1LC ratio- >= 4%

What are the capital requirements of an undercapitalized institution under
the PCA categories? (Total RBC, T1 RBC, CET1 RBC, T1LC ratios) Correct
Answer - Total RBC- < 8%
T1 RBC- < 6%
CET1 RBC- < 4.5%
T1LC ratio- < 4%

What are the capital requirements of a significantly undercapitalized
institution under the PCA categories? (Total RBC, T1 RBC, CET1 RBC, T1LC
ratios) Correct Answer - Total RBC- < 6%
T1 RBC- < 4%
CET1 RBC- < 3%
T1LC ratio- < 3%

What are the capital requirements of a critically undercapitalized institution
under the PCA categories? Correct Answer - Tangible equity/ATA <=2%

How do you calculate tangible equity capital? Correct Answer - TEC=
(T1C + Perpetual preferred stock in T2) / average total assets

If a bank has a leverage ratio of 9%, a RBC ratio of 11%, and T1 and CET1 RBC
ratio of 8.5%; however, is under a capital maintenance provision, what PCA