RBC risk weights at a glance - National Credit Union ...

1 Page 1 Risk-Based Capital Ratio: Risk weights at a GlanceFinal 2015 NCUA RuleFinal FDIC Comparable to FDIC Risk Weight?CategorySub-CategoryRisk WeightRisk Weight(Yes/No)Equity (Includes undivided earnings, regular reserves, appropriation for non-conforming investments, other reserves, equity aquired in merger, net income, and secondary capital authorized for low-income designated Credit unions)100%100%YAllowance for Loan and Lease LossesNo capCapped at of risk assetsNNational Credit Union Share Insurance Fund (NCUSIF) Capitalization Deposit-100%n/an/aGoodwill-100% 1-100%YOther intangible assets (excludes mortgage servicing assets) -100% 1-100%YCash & DepositsCash, currency, coin0%0%YCash on deposit on transaction accountn/a 2n/a 2n/aCash items in process of collectionn/a 220%n/aBalances due from Federal Reserve Banks0%0%YInsured deposits in federally insured depository institutions0%0%YUninsured deposits in federally insured depository institutions20%20%Y2 The rule accounts for deposits as insured or uninsured for risk-weight non-perpetual capital (membership capital)

2 100%n/an/aCorporate perpetual capital (paid-in capital)100% 3 or 150% n/an/aDirect unconditional claims on government0%0%YDebt instruments issued by NCUA and FDIC0%0%YCentral Liquidity Facility stock0%0%YAgency obligations20%20%YGeneral obligation bonds issued by state or political subdivisions20%20%YFederal Home Loan Bank stock20%20%YInvestment funds holding only 0% - 20% risk-weighted 703 permissible investments20%7 YAgency and GSE MBS or ABS structured securities20% 4,520%YRevenue bonds issued by state or political subdivisions50% 550%YNon-agency residential MBS structured securities50% 4,56 YInterest-only MBS strips100%100%YIndustrial development bonds100%100%YGeneral account permanent insurance100%100%YMutual funds Part 703 compliant100% 7n/an/aNon-subordinated tranche of any investment100% 66 YCharitable donation accounts100%100%YGSE equity exposure or preferred stock100%100%YSeparate account insurance300% 77 YPublicly traded equity investment (non CUSO)100% 3 or 300%300%YFair value of mutual funds not compliant with Part (c)300% 77 YNon-publicly traded equity investment (non CUSO)100% 3 or 400%400%YSubordinated tranche of any investment1,250% 66Y3 Subject to the non-significant equity exposure Exclude interest loans (deposits held in-house)0%0%YShare-secured loans (deposits held in another financial institution)20%20%YGovernment-guaranteed portion of loan balances20%20%YCurrent secured consumer loans75%100%NNumerator6 FDIC is subject to Gross-Up or Simplified Supervisory Formula Approach, NCUA has option of using Gross-Up FDIC is subject to Look-Through Approach, NCUA has the option of using the Look-Through Special handling for allowing goodwill and other intangibles related to supervisory mergers incurred prior to 2015; phase-out date 2 Risk-Based Capital Ratio: Risk weights at a GlanceFinal 2015 NCUA RuleFinal FDIC Comparable to FDIC Risk Weight?

3 CategorySub-CategoryRisk WeightRisk Weight(Yes/No)Loans unsecured consumer loans100%100%YCurrent non-federally insured student loans100%100%YNon-current consumer loans150%150%YStatutory multifamily mortgage treatment for FDIC Commercial50%NCurrent 1st-lien residential real estate loans <35% of assets50% 850%YCurrent 1st-lien residential real estate loans >35% of assets 975% 850%NNon-current 1st-lien residential real estate 100%100%YCurrent junior real estate loans < 20% of assets100% 8100%YCurrent junior real estate loans > 20% of assets 9150% 8100%NNon-current junior real estate loans150%100%NCurrent commercial loans < 50% of assets100% 11100% or 150% 10 YCurrent commercial loans > 50% of assets 9150% 11100% or 150% 10 NCommercial loan balances secured by compensating balances20%n/an/aNon-current commercial loans150%150%Y8 Includes 1- to 4-family, non-owner occupied real estate These are loans above the concentration risk thresholds for Credit FDIC identifies certain loans as High Volatility Commercial Real Estate (HVCRE) and assigns a 150% risk AssetsLoans to CUSOs (unconsolidated only)100%100%YInvestments in CUSOs (unconsolidated only)100% 12 or 150% 100% - 600%NMortgage servicing assets (carry value)250%250%YAll other assets100%100%YDeductions from DenominatorNCUSIF capitalization deposit-100%n/an/aGoodwill-100% 1-100%YOther intangible assets (excludes mortgage servicing assets)-100% 1-100%YOff-Balance Sheet ItemsCredit Conversion Factor (CCF) / Risk Weighted (RW).

4 CCF/RWCCF/RWCommercial loans transferred with recourse100%/100%100%/100%Y1st-lien residential real estate loans transferred with recourse100%/50%100%/50%YJunior-lien real estate transferred with recourse100%/100%100%/100%YNon-federally guaranteed student loans transferred with recourse100%/100%n/an/aAll other secured consumer loans transferred with recourse100%/75%100%/100%NAll other unsecured consumer loans transferred with recourse100%/100%100%/100%Y(NCUA) Loans transferred to FHLB under the Mortgage Partnership Finance Program20%/50%n/an/aUnfunded commercial loan commitments50%/100%20%-50%/100% 13 NUnfunded 1st-lien residential real estate loan commitments10%/50%0%-50%/50% 13 NUnfunded junior-lien real estate loan commitments10%/100%0%-50%/100% 13 NUnfunded secured consumer loans10%/75%0%/100% 13 NUnfunded unsecured consumer loans10%/100%0%/100% 13 NThis summary was prepared for general comparison purposes. Please read the rule text and preamble for more detail about each risk NCUA final rule excludes from commercial loans 1- to 4-family, non-owner occupied first- or junior-lien real estate loans and excludes any loans secured by a vehicle generally manufactured for personal FDIC - Credit Conversion Factor (CCF) is 0% if loan commitment is unconditionally cancellable.

5 CCF is 20% if loan commitment is conditionally cancellable within 1 year and 50% if loan commitment is conditionally cancellable beyond 1 Subject to the Non-significant Equity Exposure measur