Starting with the first assessment period of 2007, no later than 15 days prior to the payment date specified in paragraph (b)(2) of this section, the Corporation will provide to each insured depository institution a quarterly certified statement invoice showing the amount of the assessment payment due from the institution for the prior quarter (net of credits or dividends, if any), and the computation of that amount. An undercapitalized institution is one that does not qualify as either Well Capitalized or Adequately Capitalized under paragraphs (a)(2)(i) and (ii) of this section. 25, 2016, as amended at 83 FR 14568, Apr. (a) Scope. Weighted average CAMELS ratings between 1 and 3.5 are assigned a score between 25 and 100 according to the following equation: S = the weighted average CAMELS score; and. 0000022707 00000 n Non-compliance with any covenants must be promptly addressed. [76 FR 10704, Feb. 25, 2011, as amended at 79 FR 70437, Nov. 26, 2014]. (c) Accounts Payable Detail: A listing of each accounts payable owed to the borrower. The total score is subject to adjustment, up or down, by a maximum of 15 points, as set forth in paragraph (b)(3) of this section. If, during an assessment period, a CAMELS composite rating change occurs that results in a Risk Category I institution moving from Risk Category I to Risk Category II, III or IV, the institution's initial base assessment rate for the portion of the assessment period that it was in Risk Category I shall be the maximum initial base assessment rate for the relevant assessment period, subject to adjustment pursuant to paragraph (e)(2) of this section, as appropriate, and adjusted for the actual assessment rates set by the Board under 327.10(f). Exceptions may occur for institutions primarily funded through insured deposits which the model assumes to grow prior to failure. Notice of the procedures applicable to appeals will be included with the written determination. Initial base assessment rates are subject to adjustment pursuant to paragraphs (b)(3) and (e)(1) and (2) of this section; highly complex institutions that are not well capitalized or have a CAMELS composite rating of 3, 4 or 5 shall be subject to the adjustment at paragraph (e)(3) of this section; these adjustments shall result in the institution's total base assessment rate, which in no case can be lower than 50 percent of the institution's initial base assessment rate. (1) The certified statement shall also be known as the quarterly certified statement invoice. Except as adjusted for the actual assessment rates set by the Board under 327.10(f), the uniform amount shall be: (A) 7.352 whenever the assessment rate schedule set forth in 327.10(b) is in effect; (B) 6.188 whenever the assessment rate schedule set forth in 327.10(c) is in effect; or. Asset-Based and Floor Plan Lending Exclusions. The weighted average of the C, A, M, E and L component ratings regressor is based on component ratings obtained from the most recent bank examination conducted within 24 months before the date of the report of condition. The performance and loss severity scores are combined to produce a total score. An institution that has received an exemption under paragraph (i)(1) of this section may request that the FDIC withdraw the exemption.
If, during a quarter, a ROCA rating change occurs that results in an insured branch of a foreign bank moving from Risk Category II, III or IV to Risk Category I, the institution's assessment rate for the portion of the quarter that it was in Risk Category I shall equal the rate determined as provided using the weighted average ROCA component rating. Notice of an institution's current assessment risk assignment will be provided to the institution with each quarterly certified statement invoice. (iv) The credit quality score is the greater of the criticized and classified items to Tier 1 capital and reserves score or the underperforming assets to Tier 1 capital and reserves score. 4, 2009, as amended at 76 FR 10720, Feb. 25, 2011; 76 FR 17521, Mar. (3) Adjustment to total score for large institutions and highly complex institutions. A higher-risk securitization excludes the maximum amount that is recoverable from the U.S. government under guarantee or insurance provisions. The maximum downgrade probability cutoff value will be the minimum downgrade probability among the fifteen percent of all small insured institutions in Risk Category I (excluding new institutions) with the highest estimated downgrade probabilities, computed using values of the risk measures as of June 30, 2008. All insured depository institutions shall make scheduled quarterly FICO payments on January 2, 2007 (unless prepaid on December 30, 2006), and March 30, 2007, based upon, respectively, their September 30, 2006, and December 31, 2006 reported assessment bases, which shall be the final assessment bases calculated pursuant to 12 CFR 327.5(a) and (b) (2006). (i) A large institution other than a highly complex institution shall have its initial base assessment rate determined using the scorecard for large institutions. The FDIC retains the authority to verify that banks have sound internal controls and administration practices for asset-based and floor plan loans that are excluded from a bank's reported higher-risk C&I loans and securities totals. The FDIC will provide banks with a minimum one quarter advance notice of changes in the cutoff values for the higher-risk assets to Tier 1 capital and reserves ratio with their quarterly deposit insurance invoice. (iv) Risk category IV. The loss rate for each loan category for each bank with over $5 billion in total assets was calculated for each of the last twenty calendar years (1990-2009). Microsoft Edge, Google Chrome, Mozilla Firefox, or Safari. (h) Assessment rates for bridge depository institutions and conservatorships. Total loans and lease financing receivables past due 30 through 89 days and still accruing interest divided by gross assets (gross assets equal total assets plus allowance for loan and lease financing receivable losses and allocated transfer risk). ), (b) For automobile floor plans, each loan advance must be made against a specific automobile under a borrowing base certificate held as collateral at no more than 100 percent of, (i) dealer invoice plus freight charges (for new vehicles) or. (5) Institutions' shares of aggregate shortfall assessment. Quarterly certified statement invoices provided by the Corporation may reflect adjustments, initiated by the Corporation or an institution, resulting from such factors as amendments to prior quarterly reports of condition, retroactive revision of the institution's assessment risk assignment, and revision of the Corporation's assessment computations for prior quarters. If the loan is made to a subsidiary of a larger organization, the debt-to-EBITDA ratio may be calculated using the financial statements of the subsidiary or, if the parent company has unconditionally and irrevocably guaranteed the borrower's debt, using the consolidated financial statements of the parent company. (i) The ability to withstand asset-related stress score is a weighted average of the scores for four measures: Leverage ratio; concentration measure; the ratio of core earnings to average quarter-end total assets; and the credit quality measure. Please do not provide confidential Branches and Agencies of Foreign Banks. learn more about the process here. (For the regression, the S component is omitted. The annual total base assessment rates for all established small institutions with a CAMELS composite rating of 3 shall range from 3 to 30 basis points. The performance score for highly complex institutions is the weighted average of the scores for three components: Weighted average CAMELS rating, weighted at 30 percent; ability to withstand asset-related stress score, weighted at 50 percent; and ability to withstand funding-related stress score, weighted at 20 percent. (7) Award and notice of assessment credits -. A quarterly certified statement invoice delivered by any alternative means will be treated as if it had been downloaded from FDICconnect. Given the resulting total liabilities after runoff, assets are then reduced pro rata to preserve the relative amount of assets in each of the following asset categories and to achieve a Leverage ratio of 2 percent: Federal Funds Sold and Repurchase Agreements; Table D.2 shows loss rates applied to each of the asset categories as adjusted above. 5, 2018; 84 FR 1353, Feb. 4, 2019; 84 FR 66838, Dec. 6, 2019; 85 FR 38292, June 26, 2020]. An insured depository institution may enter into an agreement to transfer, but not pledge, any portion of that institution's prepaid assessment to another insured depository institution, provided that the parties to the agreement notify the FDIC's Division of Finance and submit a written agreement, signed by legal representatives of both institutions. (3) Ability to withstand funding related stress score. (C) The institution's portion, determined according to paragraph (a)(5)(v) of this section, of $10 billion; provided, however, that an institution's surcharge base for an assessment period cannot be negative.
(e) Amendment by institution. (iii) Mergers and consolidations. (3) Money Market Mutual Fund Liquidity Facility. The annual total base assessment rates for Risk Category II shall range from 9 to 24 basis points.
Interest payable under this paragraph shall be determined in accordance with 327.7. <<5A3DD56C8EEF5848BC5DC1B8BA9D4EAB>]/Prev 502941/XRefStm 1574>> This amount is divided by the institution's assessment base. (B) Maintains the eligible assets prescribed under 347.210 of this chapter at 108 percent or more of the average book value of the insured branch's third-party liabilities for the quarter ending on the report date specified in paragraph (d)(2) of this section. Criticized and classified items include items an institution or its primary federal regulator have graded Special Mention or worse and include retail items under Uniform Retail Classification Guidelines, securities, funded and unfunded loans, other real estate owned (ORE), other assets, and marked-to-market counterparty positions, less credit valuation adjustments. Foreign deposits are treated as fully secured because of the potential for ring fencing. (2) Imposition and announcement of emergency special assessments. (1) Applicability. The term Paycheck Protection Program means the program of that name that was created in section 1102 of the Coronavirus Aid, Relief, and Economic Security Act. (vii) Each of the measures used to calculate the ability to withstand asset-related stress score is assigned the following cutoff values and weights: Cutoff Values and Weights for Measures To Calculate the Ability To Withstand Asset-Related Stress Score. (2) Notification of shortfall. If, during an assessment period, a CAMELS composite rating change occurs in a way that changes the institution's initial base assessment rate, then the institution's initial base assessment rate for the portion of the assessment period prior to the change shall be determined using the assessment schedule for the appropriate CAMELS composite rating in effect before the change, including any minimum or maximum initial base assessment rates, and subject to adjustment pursuant to paragraphs (e)(1) and (2) of this section, as appropriate, and adjusted for actual assessment rates set by the Board under 327.10(f). The financial ratios used to determine the assessment rate for an established small institution shall be based upon information contained in an institution's Consolidated Reports of Condition and Income (or successor report, as appropriate) dated as of March 31 for the assessment period beginning the preceding January 1; dated as of June 30 for the assessment period beginning the preceding April 1; dated as of September 30 for the assessment period beginning the preceding July 1; and dated as of December 31 for the assessment period beginning the preceding October 1. (d) Each loan is self-liquidating (i.e., if the borrower defaulted on the loan, the collateral could be easily liquidated and the proceeds of the sale of the collateral would be used to pay down the loan advance). For purposes of defining original amount and a higher-risk C&I borrower: (a) All C&I loans that a borrower owes to the reporting bank that meet the purpose test when made, and that are made within six months of each other, must be aggregated to determine the original amount of the loan; however, only loans in the original amount of $1 million or more must be aggregated; and further provided, that loans made before the April 1, 2013, need not be aggregated. (e) Assessment rate schedules for new institutions and insured branches of foreign banks. A processing bank or trust company is an institution whose last three years' non-lending interest income, fiduciary revenues, and investment banking fees, combined, exceed 50 percent of total revenues (and its last three years fiduciary revenues are non-zero), and whose total fiduciary assets total $500 billion or more, and whose total assets for at least four consecutive quarters have been $10 billion or more. Cutoff values for the loss severity measure are: (1) The performance and loss severity scores are combined to produce a total score. The application must contain a full explanation of the reasons the exemption is not needed and provide supporting documentation, including current financial statements, cash flow projections, and any other relevant information, including any information the FDIC may request. (ix) The score of each measure is multiplied by its respective weight and the resulting weighted score is summed to compute the ability to withstand asset-related stress score, which can range from 0 to 100, where a score of 0 reflects the lowest risk and a score of 100 reflects the highest risk.
If the DIF reserve ratio has reached 1.35 percent by December 31, 2018, the DIF increase shall equal 0.2 percent of estimated insured deposits as of the date that the DIF reserve ratio first reaches or exceeds 1.35 percent. trailer In the first assessment period after June 30, 2016, that the reserve ratio of the DIF as of the end of the prior assessment period has reached or exceeded 1.15 percent, and for all subsequent assessment periods, the total base assessment rates after adjustments for a new small institution shall be the rate prescribed in the following schedule, even if the reserve ratio equals or exceeds 2 percent or 2.5 percent: (1) Risk category I total assessment rate schedule. All of these ratios are described in appendix A of this subpart and the method of calculating the scores is described in appendix B of this subpart. All institutions shall be subject to an adjustment of assessment rates for unsecured debt held that is issued by another depository institution. The annual initial base assessment rates for all established small institutions with a CAMELS composite rating of 3 shall range from 6 to 30 basis points.
Potential Losses/Total Domestic Deposits (Loss Severity Measure).
Appendix B of this subpart describes how each measure is converted to a score.
The FDIC shall notify each insured depository institution subject to the shortfall assessment of the amount of such institution's share of the shortfall assessment described in paragraph (b)(5) of this section no later than 15 days before such shortfall assessment is due, as described in paragraph (b)(3) of this section. The portion of an assessment risk assignment provided to an institution by the Corporation pursuant to paragraph (a) of this section that reflects any supervisory evaluation or confidential information is deemed to be exempt information within the scope of 309.5(g)(8) of this chapter and, accordingly, is governed by the disclosure restrictions set out at 309.6 of this chapter. (6) Effect of mergers and consolidations on shortfall assessment. xref Monthly accounts receivable and inventory agings must be received in sufficient detail to allow the lender to compute the required ineligibles. 1831f), and 12 CFR 337.6, including brokered reciprocal deposits as defined in 327.8(q), and brokered deposits that consist of balances swept into an insured institution from another institution. Fully secured is defined as a 100 percent or lower LTV ratio after applying the appropriate discounts (determined by the loan agreement) to the collateral. The term quarterly report of condition means a report required to be filed pursuant to section 7(a)(3) of the Federal Deposit Insurance Act. An application shall be deemed denied unless the FDIC notifies an applying institution by December 15, 2009, that the exemption is withdrawn. The official, published CFR, is updated annually and available below under (m) Unsecured debt. Changes to an insured institution's risk assignment resulting from a supervisory ratings change become effective as of the date of written notification to the institution by its primary federal regulator or state authority of its supervisory rating (even when the CAMELS component ratings have not been disclosed to the institution), if the FDIC, after taking into account other information that could affect the rating, agrees with the rating. (f) Rescheduling principal or interest payments to create or increase a balloon payment or extend the legal maturity date of the loan by more than six months. The FDIC, after consultation with an institution's primary federal regulator, will exercise its discretion as supervisor and insurer to exempt an institution from the prepayment requirement under paragraph (a) of this section if the FDIC determines that the prepayment would adversely affect the safety and soundness of that institution. (A) Changes between risk categories. The Deposit Insurance Fund as defined in 12 U.S.C. (3) Requirements. The resulting sum - the initial base assessment rate - will equal an institution's total base assessment rate; provided, however, that no institution's total base assessment rate will be less than the minimum total base assessment rate in effect for Risk Category I institutions for that quarter nor greater than the maximum total base assessment rate in effect for Risk Category I institutions for that quarter. II. The performance score for large institutions is a weighted average of the scores for three measures: the weighted average CAMELS rating score, weighted at 30 percent; the ability to withstand asset-related stress score, weighted at 50 percent; and the ability to withstand funding-related stress score, weighted at 20 percent. (13) Remittance of credits. To the extent that an institution's outstanding balance of loans provided under the Paycheck Protection Program exceeds its borrowings from the Federal Reserve Banks under the Paycheck Protection Program Liquidity Facility, the FDIC will add the amount of outstanding loans provided under the Paycheck Protection Program in excess of borrowings under the Paycheck Protection Program Liquidity Facility to cash. If a depository institution whose insured status has been terminated is permitted by the Corporation to continue or resume its status as an insured depository institution before the insurance of its deposits has ceased, the institution will be deemed, for assessment purposes, to continue as an insured depository institution and must thereafter file and certify its quarterly certified statement invoices and pay assessments as though its insured status had not been terminated. [74 FR 9557, Mar. The institution's asset values are then further reduced so that the Leverage Ratio reaches 2 percent. (i) If the reserve ratio of the DIF is at least 1.15 percent but has not reached or exceeded 1.35 percent as of December 31, 2018, the shortfall assessment shall be imposed on March 31, 2019, and shall equal 1.35 percent of estimated insured deposits as of December 31, 2018, minus the actual DIF balance as of that date. See Appendix C for the detailed description of the ratio. (A) Performance score for highly complex institutions. Sum of cash and balances due from depository institutions, federal funds sold and securities purchased under agreements to resell, and the market value of available for sale and held to maturity agency securities (excludes agency mortgage-backed securities but includes all other agency securities issued by the U.S. Treasury, U.S. government agencies, and U.S. government sponsored enterprises) divided by the sum of federal funds purchased and repurchase agreements, other borrowings (including FHLB) with a remaining maturity of one year or less, 5 percent of insured domestic deposits, and 10 percent of uninsured domestic and foreign deposits. In the first assessment period after June 30, 2016, where the reserve ratio of the DIF as of the end of the prior assessment period has reached or exceeded 1.15 percent, and for all subsequent assessment periods where the reserve ratio as of the end of the prior assessment period is less than 2 percent, the initial base assessment rate for established small institutions and large and highly complex institutions, except as provided in paragraph (f) of this section, shall be the rate prescribed in the following schedule: Initial Base Assessment Rate Schedule Beginning the First Assessment Period After June 30, 2016, Where the Reserve Ratio as of the End of the Prior Assessment Period Has Reached 1.15 Percent, and for All Subsequent Assessment Periods Where the Reserve Ratio as of the End of the Prior Assessment Period Is Less Than 2 Percent1.
The payment date for any emergency special assessment shall be the date provided in 327.3(b)(2) for the institution's quarterly certified statement invoice for the calendar quarter in which the emergency special assessment was imposed. The maximum downgrade probability cutoff value is 0.1506. The concentration score for large institutions is the higher of the following two scores: (1) Higher-Risk Assets/Tier 1 Capital and Reserves. (C) Total Score. When a bank acquires a C&I loan originally made on or after April 1, 2013, by another lender, it must determine whether the borrower is a higher-risk borrower as a result of the loan as soon as reasonably practicable, but not later than one year after acquisition.
Ineligibles must be established for inventory that exhibit characteristics that make it difficult to achieve a realizable value or to obtain possession of the inventory. [3] The higher-risk concentration ratio is rounded to two decimal points. 327.16 Assessment pricing methods - beginning the first assessment period after June 30, 2016, where the reserve ratio of the DIF as of the end of the prior assessment period has reached or exceeded 1.15 percent. If a payment date specified in paragraph (b)(2) falls on a date that is not a business day, the applicable date shall be the previous business day.
The annual total base assessment rates for all established small institutions with a CAMELS composite rating of 4 or 5 shall range from 11 to 30 basis points. (ii) Risk category II. 0000003033 00000 n startxref Except as provided in paragraph (a)(2)(ii) of this section, average tangible equity shall be calculated using monthly averaging. Each ratio is described in appendix A of this subpart. Exclude total outstanding borrowings from the Federal Reserve Banks under the Paycheck Protection Program Liquidity Facility.
(a) Established small institutions. The bank may report using this approach (if it first notifies the FDIC of its intention to do so), while the FDIC evaluates the methodology. The resulting sum shall equal the institution's initial base assessment rate; provided, however, that no institution's initial base assessment rate shall be less than the minimum initial base assessment rate in effect for Risk Category I institutions for that quarter nor greater than the maximum initial base assessment rate in effect for Risk Category I institutions for that quarter. (i) Institutions that must report average consolidated total assets using a daily averaging method. (2) New large institutions and new highly complex institutions. When calculating the trailing pro-forma EBITDA for the combined company, no adjustments are allowed for economies of scale or projected cost savings that may be realized subsequent to the acquisition unless specifically permitted for that borrower under the loan agreement. A teaser-rate mortgage loan is defined as a mortgage with a discounted initial rate where the lender offers a lower rate and lower payments for part of the mortgage term. The bank (or lead bank or agent bank in the case of a participation or syndication) must have a perfected first priority security interest, a security agreement, and a collateral assignment of the deposit account that is irrevocable for the remaining term of the loan or commitment. The annual total base assessment rates for Risk Category IV shall range from 30 to 45 basis points. (B) The product of the increase multiplier set out in paragraph (a)(5)(iv) of this section and the aggregate deposit insurance assessment bases, determined according to 327.5, as of December 31, 2015, of all of the small institutions, as defined in 327.8(e), that were the institution's affiliated insured depository institutions for the assessment period ending December 31, 2015. The FDIC will prorate the newly insured institution's assessment amount to reflect the number of days it was insured during the period. Surcharges and assessments required to raise the reserve ratio of the DIF to 1.35 percent. (2) Except as provided in paragraph (e)(3) of this section and 327.17(e), if, after December 31, 2006, an institution classified as large under paragraph (f) of this section (other than an institution classified as large for purposes of 327.9(e) and 327.16(f)) reports assets of less than $10 billion in its quarterly reports of condition for four consecutive quarters, excluding assets as described in 327.17(e), the FDIC will reclassify the institution as small beginning the following quarter. For purposes of the unsecured debt adjustment as set forth in 327.9(d)(1) and 327.16(e)(1)and the depository institution debt adjustment as set forth in 327.9(d)(2) and 327.16(e)(2), long-term unsecured debt shall be unsecured debt with at least one year remaining until maturity; however, any such debt where the holder of the debt has a redemption option that is exercisable within one year of the reporting date shall not be deemed long-term unsecured debt. Examples of detailed reports that must be provided to the asset-based and floor plan lending bank include: (a) Borrowing Base Certificates: Borrowing base certificates, along with supporting information, must include: (i) The accounts receivable balance (rolled forward from the previous certificate); (ii) Sales (reported as gross billings) with detailed adjustments for returns and allowances to allow for proper tracking of dilution and other reductions in collateral; (iii) Detailed inventory information (e.g., raw materials, work-in-process, finished goods); and. (h) Disposition in the event of failure or termination of insured status. All new small institutions in Risk Categories II, III, and IV shall be subject to the brokered deposit adjustment as determined under paragraph (d)(3) of this section. (iii) If the unclaimed and unpaid deposits are disposed of as provided in paragraph (c)(2)(ii) of this section, an affidavit of the publication and of the mailing of the notice to the depositors, together with a copy of the notice and a certified copy of the contract of assumption, shall be furnished to the Corporation. Tier 1 capital shall be reported in the same manner. The dependent variable takes a value of 1 if a downgrade occurs and 0 if it does not. (i) Assessment credit share.