Capital- FDIC TE
What are the capital requirements for a well-capitalized institution under the PCA categories? (Total
RBC, T1 RBC, CET1 RBC, T1LC ratios) - 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) - 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) - 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) - 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? -
Answer-Tangible equity/ATA <=2%
How do you calculate tangible equity capital? - 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 category is the bank in? - Answer-Adequately
Capitalized due to capital maintenance provision.
If a bank has a leverage ratio of 8%, a total RBC ratio of 5.5%, and T1 and CET1 RBC ratio of 4.5%, what
PCA category is the bank in? - Answer-Significantly under capitalized
If a bank has a leverage ratio of 4%, a total RBC ratio of 9%, and T1 and CET1 RBC ratio of 5%, what PCA
category is the bank in? - Answer-Adequately Capitalized
What are Undercapitalized banks required to submit? - Answer-A capital restoration plan.
Who must guarantee compliance with a capital restoration plan? - Answer-The holding company
What allows an institution not meeting the minimum leverage ratio to be deemed unsafe and unsound
(if no written agreement or plan is in place? - Answer-Section 8 of the FDIC act & Section 324.4(b)
An institution may be deemed unsafe or unsound if they do not meet the minimum leverage ratio
requirements, unless: - Answer-1- it enters into and is in compliance with a written agreement; or,
2- submitted and is in compliance with a plan to increase the ratio
A bank with T1C / TA of less than ___ percent may be deemed unsafe and unsound. - Answer-2
What are the capital requirements for a well-capitalized institution under the PCA categories? (Total
RBC, T1 RBC, CET1 RBC, T1LC ratios) - 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) - 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) - 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) - 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? -
Answer-Tangible equity/ATA <=2%
How do you calculate tangible equity capital? - 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 category is the bank in? - Answer-Adequately
Capitalized due to capital maintenance provision.
If a bank has a leverage ratio of 8%, a total RBC ratio of 5.5%, and T1 and CET1 RBC ratio of 4.5%, what
PCA category is the bank in? - Answer-Significantly under capitalized
If a bank has a leverage ratio of 4%, a total RBC ratio of 9%, and T1 and CET1 RBC ratio of 5%, what PCA
category is the bank in? - Answer-Adequately Capitalized
What are Undercapitalized banks required to submit? - Answer-A capital restoration plan.
Who must guarantee compliance with a capital restoration plan? - Answer-The holding company
What allows an institution not meeting the minimum leverage ratio to be deemed unsafe and unsound
(if no written agreement or plan is in place? - Answer-Section 8 of the FDIC act & Section 324.4(b)
An institution may be deemed unsafe or unsound if they do not meet the minimum leverage ratio
requirements, unless: - Answer-1- it enters into and is in compliance with a written agreement; or,
2- submitted and is in compliance with a plan to increase the ratio
A bank with T1C / TA of less than ___ percent may be deemed unsafe and unsound. - Answer-2
