(1) Happytown bank has the ratios given below:

a) Profit margin: 21%
b) Asset utilization: 11%
c) Equity multiplier: 12X

Compute Happytown’s ROE and ROA.

2) 2 depository institutions have compound CAMELS ratings of 1 or 2 and are “well capitalized.” Therefore, each institution falls into FDIC Risk Category deposit insurance assessment scheme. Additional, the institutions have given financial ratios and CAMELS ratings:

                                                       Insitution1   Institution 2
Tier I leverage ratio (%)                      10.25           7
Loans past due 30-89
days/gross assets (%)                         0.6         0.82
Nonperforming
assets/gross assets (%)                     0.45         0.9
Net loan charge-offs/
gross assets (%)                                0.08         0.25
Net income before
taxes/risk- weighted assets (%)           2.4        1.65
Adjusted brokered deposits ratio (%)    0          25.89

CAMELS components:
C 1 2
A 1 1
M 1 1
E 2 1
L 1 3
S 2 3

Compute initial deposit insurance assessment for each institution.