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Deposit Insurance Assessments

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Risk Categories & Risk-Based Assessment Rates

Key Provisions Pertaining to Risk-Based Assessments

On February 7, 2011, the FDIC adopted a final rule modifying the risk-based assessment system and setting initial base assessment rates beginning April 1, 2011, at 5 to 35 basis points. Final total base assessment rates after possible adjustments are 2.5 to 45 basis points. Please see FIL-8-2011 for more information.

Assessment Rates: The new initial base assessment rates as of April 1, 2011, are as follows:

Initial Base Assessment Rates

Risk Category
I *
II
III
IV
Large &
Highly
Complex
Institutions
Minimum
Maximum
Annual Rates (in basis points)
5
9
14
23
35
5 - 35

*Initial base rates that were not the minimum or maximum rate will vary between these rates.


After applying all possible adjustments, minimum and maximum total base assessment rates for each risk category are as follows:

Total Base Assessment Rates for established institutions (insured 5 or more years) *
 
Risk
Category
I
Risk
Category
II
Risk
Category
III
Risk
Category
IV
Large &
Highly
Complex
Institutions**
Initial Base Assessment Rate
59
14
23
35
5 - 35
Unsecured Debt Adjustment (added)***
-4.5 to 0
-5 to 0
-5 to 0
-5 to 0
-5 to 0
Brokered Deposit Adjustment (added)
N/A
0 to 10
0 to 10
0 to 10
0 to 10
Total Base Assessment Rate
2.5 to 9
9 to 24
18 to 33
30 to 45
2.5 to 45
* Total base assessment rates do not include the depository institution debt adjustment.
** See 327.8(f) and 327.8(g) for the definition of large and highly complex institutions.
*** The unsecured debt adjustment cannot exceed the lesser of 5 basis points or 50 percent of an insured depository institution's initial base assessment rate.


Small Risk Category I Institutions: For small institutions in Risk Category I, base assessment rates will be based on a combination of financial ratios and CAMELS component ratings (the financial ratios method).

Under the financial ratios method, each financial ratio and a weighted average of CAMELS component ratings is multiplied by a pricing multiplier. The weights applied to CAMELS components are as follows: 25 percent for Capital and Management; 20 percent for Asset quality; and 10 percent each for Earnings, Liquidity, and Sensitivity to market risk. The CAMELS component weights and pricing multipliers are the same for all institutions subject to the financial ratios method.

Large Institutions: Beginning second quarter of 2011, the FDIC will assess all large institutions for deposit insurance using the large bank scorecard method set forth in the final rule adopted by the board on February 7th, 2011. Current small institutions must continue to meet the current criteria of 4 consecutive quarters of total assets greater than $10 billion to be subject to the scorecard; however, new institutions with total assets over $10 billion upon establishment will be subject to the scorecard and a weighted average CAMELS rating of "2" will be used until ratings are assigned. Long term debt issuer ratings and the financial ratios method (small bank model) will no longer be used to derive assessment rates of large institutions. The scorecard will determine a performance score between 0 and 100 using forward-looking risk measures which are also scored between 0 and 100 based on historical cutoffs. The performance score will be increased or decreased by up to 20% based on the loss severity model to determine a total score. The total score, with a minimum of 30 and maximum of 90, is converted to an initial assessment rate based on the current rate schedule of 5-35bps. The initial assessment rate for large non-Risk Category I institutions will no longer be limited to fixed assessment rates by risk category. Additionally, the FDIC board has adopted revised guidelines to allow for both upward and downward discretionary adjustments to the total score up to 15 points, subject to the total score minimum and maximum. The FDIC only intends to pursue material adjustments and expects that a limited number of adjustments will be made on a quarterly basis. In general, the FDIC will primarily consider two types of information in determining whether to make an adjustment: (a) a scorecard ratio that exceeds the maximum cutoff value or is less than the minimum cutoff value; and (b) information not directly captured in the scorecard.

Adjustments to Assessment Rates: The FDIC has three possible adjustments to an institution's initial base assessment rate: (1) a decrease of up to five basis points (or 50% of the initial base assessment rate) for long-term unsecured debt, including senior unsecured debt (other than debt guaranteed under the Temporary Liquidity Guarantee Program) and subordinated debt; (2) an increase for holding long-term unsecured or subordinated debt issued by other insured depository institutions known as the Depository Institution Debt Adjustment ("DIDA"); and (3) for institutions not well rated or well capitalized, an increase not to exceed 10 basis points for brokered deposits in excess of 10 percent of domestic deposits.

Requesting Treatment as a Large Institution

Institutions with between $5 and $10 billion in assets may request to be treated as a large institution for assessment purposes. Banks in this size range that have been approved to be treated as “large” are subject to the same adjustment provisions based on consideration of additional risk factors as those that have $10 billion or more in assets.

Assessment Rate Calculator

A calculator illustrates deposit insurance assessment rate computation for institutions using recent financial data or data supplied by the user.

Treatment of New Institutions

Newly insured institutions (those insured less than 5 years) will be charged the following rates. For more information, see New Institutions.

Total Base Assessment Rates for newly insured small institutions (those insured less than 5 years) *
 
Risk
Category
I
Risk
Category
II
Risk
Category
III
Risk
Category
IV
Initial Base Assessment Rate
9
14
23
35
Brokered Deposit Adjustment (added)
N/A
0 to 10
0 to 10
0 to 10
Total Base Assessment Rate
9
14 to 24
23 to 33
35 to 45
* Total base assessment rates do not include the depository institution debt adjustment.



Effective Date of CAMELS

CAMELS rating changes will be effective for assessment purposes as of the date the institution is notified of its rating change (transmittal date) by its primary federal regulator (PFR) or state authority. However, if the FDIC disagrees with the CAMELS composite rating assigned by an institution’s PFR, and assigns a different composite rating, the supervisory change will be effective for assessment purposes as of the date the FDIC assigns a rating.

When the CAMELS composite changes during a quarter, for assessment billing purposes, the institution receives a blended rate for the quarter. The blended rate is composed of the pro-rated assessment rates for the quarter. For example, if the transmittal date of the rating change is May 3rd, the institution would be charged at its rate that was in effect for the first 32 days of the second quarter (April 1 – May 2) and at its new rate for the last 59 days of the quarter (May 3 – June 30). The blended rate would appear on the September invoice since that invoice is payment for the second quarter. See the attached Sample Blended Rate Sheet.

     

 


Last Updated 08/29/2012 Assessments@fdic.gov