Commercial
Commercial
Commercial
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Lernkarten
Capital adequacy, Asset quality, Management quality, Earnings quality, Liquidity, Sensitivity to market risk
Risk-based capital requirements are now used. The regulators also evaluate the bank’s loss experience, amount of problem assets in relation to capital, and the institution’s access to capital.
Banks are required to classify assets according to soundness and to allocate loss reserves based on their evaluation of the quality of their assets.
The technical competence of management, their history of compliance, adequacy of internal controls, compensation and experience
Stability and growth rate of earnings, peer group comparisons of profitability and interest rate risk exposure
Turnover rates of the bank’s sources of funds, particularly deposit turnover, - Percentage of core deposits versus “hot money” sources, the amount of loan commitments, and the volume of liquid assets held by the bank
Exposure of earnings and capital to changes in interest rates, foreign exchange rates, and commodity or equity prices
1 to 5 with 1 basically sound and 5 near-term probability of default
preferred and common stock, surplus or additional paid in capital, retained earnings
Off-balance-sheet items are contingent assets and liabilities that may affect a commercial bank’s balance sheet and/or income statement
Interest income- interest expenses
Noninterest income - noninterest expenses (Fees and Provision)
Time series analysis, Cross-sectional analysis
Return on equity (ROE)
Net income / total equity = ROA x EM
Net income / total assets
Total assets / total equity
Net income / total operating income
total operating income / total assets
interest expense / total operating income
Provision for loan losses / total operating income
Noninterest expenses / Total operating income
Income Taxes / Total operating income
(Interest income / earning assets) - (interest expenses / interest-bearing liabilities)
book value of common equity + retained earnings - goodwill
Well capitalized to critically undercapitalized
25/20/25/10/10/10
Minimum: 5, Maximum 9
Risk Category 2
14
23
35
4.5%
6%
8%
2.5%
0 - 2.5%
With best efforts underwriting, investment bankers act as agents ona fee basis related to their success in placing the issue with investors.
Firm Commitment underwriting
In firm commitment underwriting, the investment bank acts as a principal, purchasing the securities from the issuer at one price and seeking to place them with public investors at a slightly higher price.
Overhead efficiency
Non-interest income / non-interest expenses
Tier I Leverage ratio
(0.056)
Loans past due 30-89 days/gross assets
0.575
