Provisions for Credit Losses & Loan Loss Reserves Calculations

($ in Millions)

Assumptions: Commercial Bank - Income Statement Loan Loss Reserve Calculations:

Annual Period: Annual Period:
Tax Rate: 40.0% Interest Income: $ 100.0 Beginning Reserve Balance: $ 10.0
Minimum Common Equity Tier 1 Ratio: 7.0% Interest Expense: (20.0)
Minimum Tier 1 Capital Ratio: 8.5% Net Interest Income: 80.0 Net Charge-Offs Calculation:
Minimum Total Capital Ratio: 10.5% (-) Gross Charge-Offs:
Minimum Leverage Ratio: 3.0% Provisions for Credit Losses: - (+) Recoveries:
Net Charge-Offs: -
% of Allowance for Loan Losses in Tier 2 Capital: 50.0% Net Fee & Commission Income: 10.0
Loan Additions in Period Shown: (+) Additions to Provisions:
Non-Interest Expenses: (40.0)
Commercial Bank - Balance Sheet Ending Reserve Balance: $ 10.0
ASSETS: Beginning: Ending: Pre-Tax Income: 50.0
Cash: $ 100.0 $ 130.0 Net Income: $ 30.0
Securities: 200.0 200.0
Commercial Bank - Cash Flow Statement
Gross Loans: 1,000.0 1,000.0 Annual Period:
Allowance for Loan Losses: (10.0) (10.0) Net Income: $ 30.0
Net Loans: 990.0 990.0 Provisions for Credit Losses: -
Changes in Assets & Liabilities:
Goodwill & Other Intangible Assets: 50.0 50.0 Additions to Gross Loans: -
Other Assets: 40.0 40.0 Changes in Securities: -
Changes in Goodwill & Intangibles: -
Total Assets: $ 1,380.0 $ 1,410.0 Changes in Other Assets: -
Changes in Deposits: -
LIABILITIES & EQUITY: Changes in Debt: -
Liabilities: Changes in Subordinated Notes: -
Deposits: $ 1,000.0 $ 1,000.0 Changes in Borrowings: -
Senior Debt: 50.0 50.0 Changes in Convertible Bonds: -
Subordinated Notes: 50.0 50.0 Preferred Issuances: -
Other Borrowings: 75.0 75.0 Common Stock Issuances: -
Convertible Bonds: 20.0 20.0 Net Change in Cash: $ 30.0
Total Liabilities: 1,195.0 1,195.0

Equity:
Common Stockholders' Equity: 135.0 165.0
Preferred Stock: 50.0 50.0
Total Equity: 185.0 215.0

Total Liabilities & Equity: $ 1,380.0 $ 1,410.0

BALANCE CHECK: OK! OK!

REGULATORY CAPITAL:

Common Equity Tier 1 (CET 1): $ 85.0 $ 115.0

(+) Preferred Stock: 50.0 50.0
Tier 1 Capital: 135.0 165.0

Tier 2 Capital:
(+) Convertible Bonds: 20.0 20.0
(+) Subordinated Notes: 50.0 50.0
(+) Qualifying Allowance for LLs: 5.0 5.0
Total Tier 2 Capital: 75.0 75.0

Total Capital: $ 210.0 $ 240.0

Total Risk-Weighted Assets: 1,240.0 1,240.0

Total Tangible Assets: 1,330.0 1,360.0

Common Equity Tier 1 Ratio: 6.9% 9.3%

Tier 1 Capital Ratio: 10.9% 13.3%
Total Capital Ratio: 16.9% 19.4%
Leverage Ratio: 10.2% 12.1%