Bank Analysis School eBook

Internal Use Only

Tier 1 Capital = 60

HIGH RISK ASSET BANK & TRUST

AVG. BOOK BALANCE

RISK FACTOR

WEIGHTED VALUE

Cash

50 50

0%

0

FHLB Bonds

20% 50%

10 50

1-4 Family RE Loans Commercial Loans

100 600

100%

600

AVG. TOTAL ASSETS = 800

R-W Assets = 660

TIER 1 CAPITAL

60

TIER 1 CAPITAL

60

AVG. TOTAL ASSETS

800

TOTAL RISK-WEIGHTED ASSETS

660

TIER 1 LEVERAGE RATIO

7.50%

TIER 1 CAPITAL RATIO

9.09%

Internal Use Only