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#1728069 - 08/07/12 03:20 PM Supervisory LTV - Capital Question
RGS Offline
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RGS
Joined: Jul 2002
Posts: 689
Home of the 8 time NCAA Champ ...
The end of 12 CFR 365 has a note about the term capital for the LTV exception calculation that says "For the state member banks, the term "total capital" means "total risk-based capital" as defined in appendix A to 12 CFR Part 208. For insured state non-member banks, "total capital" refers to that term described in table 1 of appendix A to 12 CFR Part 325."

I've clicked through and read and it just confuses me more.

I "think" the calculation is:

Tier 1 Minus all of the following:
Loan Loss
Deferred Liability
Unrealized Gains/Losses
Intangib les
Goodwill
A percentage of Core Deposits (I get a bit lost here).

Am I close? Is there an easier to follow guide somewhere online (one that is set up arithmetically)?

TIA
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Risk Management
#1730347 - 08/13/12 07:28 PM Re: Supervisory LTV - Capital Question RGS
JenHack Offline
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Joined: Aug 2012
Posts: 4
When I prepare the Part 365 report and determine the limits, I use the number on the FFIEC 041 Call Report Schedule RC-R, line item 21 "Total Risk Based Capital." I am at a state non-member bank.

The calculation for Total Risk Based Capital can be followed on Schedule RC-R, and it encompasses many things. It does include, in addition to other things, the "allowable Tier 2 Capital" which is, amongst other things, the Allowance for Loan Loss Balance that is eligible for inclusion (1.25% of Total Risk Weighted Assets). I have found it very difficult to calculate Total Risk-Based Capital without the Call Report since it is dependent on the amount of ALLL eligible for inclusion and this number is not available unless you go through the risk-weighting of assets process.
Last edited by JenHack; 08/13/12 08:29 PM.
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