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      Key Terms

      This resource is designed to help you navigate our Digital Products and knowledge articles with clarity and confidence.

      • 1-4 Family:
        • This is a 1-4 family residential loan secured by a lien on a 1-4 family residential property, for which the lien is central to the extension of credit.
      • 1-4 Family / Tier 1 + ACL: 
        • This is a concentration ratio that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to residential 1-4 family loan products.
      • Average Assets (AA): 
        • AA is calculated by averaging an institution's assets over two or more periods. Using average assets provides a more representative picture of an institution's resource utilization rather than just looking at assets at a single point in time. 
      • Asset Backed Securities (ABS):  
        • These are securitization vehicles backed by a pool of assets such as credit cards, auto loans, student loans, or other similar financial assets.
      • ABS / Tier 1 + ACL: 
        • This is a concentration ratio that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to ABS.  
      • Allowance for Credit Losses (ACL): 
        • An ACL is a valuation account that adjusts the amortized cost basis of financial assets—either by deduction or addition—to reflect the net amount expected to be collected over the asset’s contractual term.
      • Agency Debt: 
        • Agency debt refers to debt securities issued by federal government departments or government-sponsored enterprises such as The Federal Home Loan Mortgage Corp., otherwise known as Freddie Mac or the Federal National Mortgage Association, otherwise known as Fannie Mae. 
      • Agricultural Production: 
        • An agricultural loan is a loan secured by farmland or used to finance agricultural production. It includes loans for crop production, livestock, and capital assets such as farmland and machinery. 
      • Agricultural Production / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to agricultural production-related loan products. 
      • Accumulated Other Comprehensive Income (AOCI): 
        • AOCI refers to the cumulative total of unrealized gains and losses from items that are included in other comprehensive income, but not in net income. These gains and losses are reported in the shareholder's equity section of a company's balance sheet. 
      • AOCI / Equity: 
        • This ratio measures the level of AOCI as a percentage of Shareholder Equity. 
      •  Bank-Specific Thresholds: 
        • Bank specific thresholds are quantitative benchmarks or tolerance levels that financial institutions establish internally to signal when individual ratios approach unacceptable levels. 
      • Borrowing Capacity: 
        • Borrowing capacity refers to the remaining number of borrowings an institution can access, based on the amount or value of investments and loans already pledged, minus the current outstanding borrowings at a particular provider (such as the Federal Reserve or FHLB). Expected borrowing capacity may be reduced by significant collateral haircuts or if funds providers face difficulties in fulfilling funding requests.
      • Brokered Deposits:
        • A brokered deposit is a deposit placed at a financial institution through the involvement of a third-party broker or intermediary. The broker places a “bid” out to the market where third parties have the option to buy the bid.  Since this process can take longer than one day, it is not considered as part of Day 1 liquidity.  Brokered deposits have the advantage of contractual terms that cannot experience early withdrawal.  
      • Brokered Deposits / Total Deposits + Total Borrowings: 
        • This is a concentration ratio that displays the institution’s reliance on brokered deposits as a funding source relative to its total funding.  
      • CAMELS: 
        • CAMELS stands for capital, asset quality, management, earnings, liquidity, and sensitivity. This is the regulatory ratings system utilized to assess an institution’s performance and determination of its safety and soundness.
      • Charge-off: 
        • This is the balance on a credit obligation that the lender no longer expects to be repaid and writes off as a bad debt. 
      • Home Equity Line of Credit (HELOC): 
        • A HELOC is a line of credit secured by the equity in a consumer's home. It can be used for home improvements, debt consolidation, and other major purchases. The funds may be accessed by writing checks against the line of credit or by getting a cash advance. 
      • HELOC / Tier 1 + ACL: 
        • This is a concentration ratio that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to HELOC loan products. 
      • Intangible Assets: 
        • Non-physical assets that derive value from their representation of legal and economic benefits. 
      • Interest-Bearing Liabilities: 
        • These are obligations that the institution owes that accrue interest over time.  Examples include time deposits, interest-bearing non-maturity deposits, and borrowings. 
      • Lease Financing Receivable: 
        • These are extensions of credit in the form of leases, either directly negotiated by a bank or purchased from other sources. These are reported as part of a bank's assets, specifically in Schedule RC-C, which is a section within the Consolidated Reports of Condition and Income (Call Report) used by banks to report loans and lease financing receivables.
      • Lease Financing Receviable / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to lease financing products. 
      • Listing Service Deposits: 
        • These are deposits that are sourced via platforms that connect institutions seeking funding with depositors, often offering rates that may be higher than typical retail deposits. 
      • Listing Service Deposits / Total Deposits + Total Borrowings: 
        • This is a concentration ratio that displays the institution’s reliance on listing service deposits as a funding source relative to its total funding. 
      • Long Term Assets: 
        • Based on the assets remaining term until contractual maturity date, long term investments mature over 3 years while long term loans mature over 5 years. 
      • Long Term Assets / Assets: 
        • Long term assets as a percentage of total assets is a ratio that is commonly used as an indicator of repricing risk. A higher ratio generally suggests that a bank has a sizable portion of assets that can’t be repriced for a long period of time. If interest rates rise such assets will lose value and depreciate, as they will pay lower yields relative to prevailing market rates.  
      • Minute 1: 
        • This is the amount of cash that the institution can access and disperse over a one-minute time horizon and remain solvent. Minute 1 liquidity is defined as the amount of Master Account funds, cash, and cash equivalents an institution has on its balance sheet at any given time and, typically, this is the amount required to meet daily cash needs. 
      • Modified Texas Ratio (Nonaccrual Assets): 
        • This is the sum of total nonaccrual assets and loans 90 days past due as a percentage of tangible equity plus total reserves. The “Texas Ratio” was first used in the 1980’s and 90’s to identify institutions that were on the verge of failure due to increased credit and deterioration of capital.  A Texas ratio of 100.0% was utilized as the threshold for impending failure. 
      • Money Market Deposits: 
        • Money market deposit accounts pay interest, but the account holder is allowed to write no more than three checks or make three digital transfers a month. 
      • Money Market Deposits / Total Deposits + Total Borrowings: 
        • This is a concentration ratio that displays the institution’s reliance on deposits in money market accounts as a funding source relative to its total funding. 
      • Multifamily: 
        • Multifamily is a type of residential real estate property with 5 or more units, such as apartments.    
      • Multifamily / Tier 1 + ACL: 
        • This is a concentration ratio that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to multifamily loan products. 
      • Net Charge-offs: 
        • Net charge-offs are calculated as the difference between gross charge-offs (debts written off as uncollectible) and any recoveries on those debts. 
      • Net Charge-offs / Total Loans: 
        • Net charge-offs as a percent of total loans is a ratio that measures the actual rate that an institution has been charging off its nonperforming loan portfolio. 
      • Net Interest Margin: 
        • The difference between the yield on assets and the cost of funding these assets (interest income - interest expense) / average earning assets). This ratio is like spread but takes into consideration the difference between earning assets and costing liabilities. 
      • Net Loans: 
        • Net loans is equal to total loans and leases minus the allowance for credit losses.
      • Net Loans / Total Deposits: 
        • Net loans as a percentage of total deposits is a ratio that measures the traditional business of an institution.  It indicates the level of loans being funded by deposits. 
      • Noninterest Expense: 
        • These are operating costs incurred by the institution such as compensation, property, furniture and fixtures, etc.  
      • Noninterest Expense - Noninterest Income: 
        • The difference between (noninterest expense / average assets) – (noninterest income / average assets). This ratio measures the difference between the operating expenses in a financial institution to the level of noninterest income that a financial institution generates.  
      • Noninterest Expense/ AA: 
        • Noninterest expense as a percentage of average assets is a ratio that measures the level of operating expenses in a financial institution. Typically, compensation is the largest expense followed by occupancy and electronic data processing (EDP). 
      • Noninterest Income: 
        • Income earned by a financial institution that is not attributable to interest paid on funds that have been leant or invested. Oftentimes used interchangeably with fee income. 
      • Noninterest Income/ AA: 
        • Noninterest income as a percentage of average assets is a ratio that measures the level of noninterest income that a financial institution generates.  Typically, this takes the form of retail banking fees, trust fees, asset management, insurance or annuity sales.  This ratio does not include gains or losses from the sale of assets.  This ratio measures “recurring” noninterest income. 
      • Non-Owner-Occupied Commercial Real Estate (CRE): 
        • Refers to real estate properties held for investment or rental purposes where the borrower does not occupy the property for their own business use. 
      • Non-Owner-Occupied CRE / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to non-owner-occupied commercial real estate loan products. 
      • Nonaccruals: 
        • Nonaccrual loans are loans on which the institution has stopped accruing interest because the borrower is experiencing financial difficulties and timely repayment of principal or interest is in doubt. According to the Call Report instructions, a loan is placed on nonaccrual status when principal or interest is 90 days or more past due or when the bank believes collection of principal or interest is unlikely. 
      • Nonaccrual /Total Loans: 
        • Total nonaccrual loans as a percentage of the total loan portfolio. This ratio measures the level of loans in the portfolio that have stopped making payments at the bank. 
      • Noninterest-bearing Deposits / Total Deposits + Total Borrowings: 
        • This is a concentration ratio, that displays the institution’s reliance on deposits in noninterest-bearing accounts as a funding source relative to its total funding. 
      • Nonperforming Loan (NPL): 
        • Non-performing loans are loans where the borrower has defaulted or is at high risk of defaulting, meaning they are unable to meet their repayment obligations. Essentially, a loan is classified as non-performing when the lender anticipates a significant risk of not being repaid, often due to the borrower's financial distress. 
      • NPLs / Total Loans: 
        • Total nonperforming loans as a percentage of total loans. Nonperforming loans are typically defined as the sum of nonaccrual loans and troubled debt restructured. This ratio indicates the asset quality of a loan portfolio.  Historically, nonperforming loans to total loans of greater than 1.00% is considered a red flag to the regulators. 
      • Other Loans: 
        • Sum of loans given to non-depository financial institutions, other loans and loans for carrying and purchasing securities 
      • Other / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to other loan products. 
      • Other Debt Securities: 
        • Debt instruments held by an institution that exclude U.S. Treasury securities, federal agency securities, mortgage-backed securities, municipal securities, and asset-backed securities. Typically, this category includes corporate bonds and other types of debt issued by non-government entities that don’t fall into the excluded categories. 
      • Other Debt Securities / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to other debt securities. 
      • Other Savings Deposits: 
        • Deposit account designed to help customers save money while earning interest, typically with limited transaction access. 
      • Other Savings Deposits / Total Deposits + Total Borrowings: 
        • This is a concentration ratio, that displays the institution’s reliance on deposits in savings accounts as a funding source relative to its total funding. 
      • Owner-Occupied CRE: 
        • Loan secured by properties where the borrower operates its business on the premises and derives most of the cash flow from business operations rather than rental income. 
      • Owner-Occupied CRE / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to owner occupied commercial real estate loan products. 
      • Pledgeable Assets:
        • Assets that could be pledged to a borrowing source that give the institution the ability to borrow against them. 
      • Pledged Securities: 
        • Securities pledged to a borrowing source that give the institution the ability to borrow against them. The securities are not considered encumbered until funds are drawn against them.  
      • Pledged Securities / Total Securities: 
        • Pledged securities as a percentage of total securities. This ratio measures the utilized and remaining pledgeable assets within the securities portfolio. The ability to pledge assets is of high importance in a liquidity crisis when assets can be pledged as collateral to provide an additional source of liquidity.  
      • Reciprocal Deposit: 
        • Reciprocal deposits are deposits returned to a financial institution from putting the institution’s own deposits into a network that exchanges deposits with other participating institutions to increase deposit insurance coverage. This allows insured institutions to offer customers access to deposit insurance for large deposits exceeding the standard $250,000 limit. 
      • Reg CRE Guidance: 
        • Typically, 300% of construction, commercial real estate non-owner occupied, and multifamily loans divided by Tier 1 Capital plus ACL 
      • Reg CRE Guidance / Tier 1 + ACL: 
        • Construction, commercial Real Estate Non-Owner Occupied and Multifamily loans divided by Tier 1 Capital plus ACL 
      • Reserves: 
        • Synonymous with ACL, it is a valuation account that is deducted from, or added to, the amortized cost basis of financial assets to present the net amount expected to be collected over the contractual term of the assets. 
      • Reserves / Charge Offs (Shown as X times Charge Offs): 
        • Total allowance for credit losses as a percentage of charge offs. This ratio indicates the level of reserves that a financial institution has against charge offs to the loan portfolio.  
      • Reserves / Nonaccrual: 
        • Total allowance for loan and lease losses as a percentage of nonperforming loans. This ratio measures the ability of an institution to charge-off all or part of its nonaccrual loan portfolio. 
      • Reserves / Total Loans: 
        • Total allowance for loan and lease losses as a percentage of total loans. This ratio indicates the level of reserves that a financial institution has against potential losses in the loan portfolio.  Different loan types require different ALLL percentages based on the actual loss expense and perceived risk in that category for the future. 
      • Residential Mortgage-Backed Security (RMBS) – Agency: 
        • Agency RMBS are bonds backed by a pool of residential mortgage loans that are guaranteed by a US federal agency. The cash flows from these mortgages (interest and principal payments) are then used to make payments to the holders of the RMBS. 
      • Residential Mortgage-Backed Security (RMBS) – Other: 
        • Other RMBS are bonds backed by a pool of residential mortgage loans that are not guaranteed by a US federal agency. The cash flows from these mortgages (interest and principal payments) are then used to make payments to the holders of the RMBS. 
      • Retail Time Deposits:  
        • A time deposit (also known as a term deposit) is a money deposit at a bank that cannot be withdrawn for a certain "term" or period. When the term is over it can be withdrawn, or it can be held for another term. Generally, there are penalties for early withdrawal. 
      • Retail Time Deposits / Total Deposits + Total Borrowings:  
        • This is a concentration ratio, that displays the institution’s reliance on retail certificates of deposit as a funding source relative to its total funding. 
      • Risk Based Capital: 
        • The amount of capital a financial institution must hold to absorb potential losses based on the risk profile of its assets and off-balance-sheet exposures, ensuring the institution’s safety and soundness. It aligns regulatory capital requirements with the level of credit, market, and operational risks the institution faces. 
      • Risk Based Capital / Risk-Weighted Assets: 
        • Total risk-based capital as a percentage of total risk weighted assets. This is the third primary indicator of capital adequacy utilized by the regulators.  This ratio takes the inherent balance sheet risk into consideration by risk weighting each asset category.  Those institutions with less risky assets require less risk-based capital. 
      • Risk Priority: 
        • Priority of risk based upon severity of ratio compared to thresholds. 
      • Risk Weighted Assets (RWA): 
        • An Institution’s on- and off-balance sheet exposures adjusted for credit, market, and operational risk, using risk weights prescribed in the regulatory capital rules. The total RWA serves as the denominator in calculating key capital ratios, such as the Common Equity Tier 1 (CET1) and Total Capital ratios, as reported in the Call Report Schedule RC-R. 
      • RMBS – Agency / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to U.S. agency residential mortgage-backed securities. 
      • RMBS – Other / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to non-U.S. agency residential mortgage-backed securities. 
      • Return on Average Assets (ROAA): 
        • Net income as a percentage of average total assets. This is one measure of overall profitability for a financial institution.  It is typically the primary measure for mutual institutions, and it measures the return being generated for each $1 of assets. 
      • Return on Average Equity (ROAE): 
        • Net income as a percentage of average total equity. This ratio is a second measure of overall profitability.  It is the primary measure for banks and public thrifts, and measures the return being generated for each $1 of equity. 
      • State & Political Obligations: 
        • Debt securities issued by U.S. states, municipalities, or other political subdivisions. 
      • State & Political Obligations / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to municipal debt securities. 
      • State & Political Sub deposits: 
        • Deposit accounts held by U.S. state or local government entities. 
      • State & Political Sub deposits / Total Deposits + Total Borrowings: 
        • This is a concentration ratio, that displays the institution’s reliance on deposits from state and local government entities as a funding source relative to its total funding. 
      • Structured Fin Prods: 
        • Structured financial products, as reported in the Call Report, include asset-backed securities and other securitized instruments backed by pools of loans or receivables. 
      • Structured Fin Prods / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to structured financial products. 
      • Tangible Assets: 
        • Assets minus intangible assets 
      • Tangible Equity: 
        • Equity minus intangible assets 
      • Tangible Equity / Tangible Assets: 
        • Tangible equity as a percentage of total assets. Like the equity to total assets ratio, this ratio is also an indicator of capital adequacy for a financial institution.  This ratio provides the same leverage data as the Equity/Assets ratio except that it factors into the calculation the institution's intangible asset level. 
      • Tier 1 (Core) Capital: 
        • Common stock, undivided profits, paid-in surplus and noncumulative perpetual stock minus the sum of intangible assets, identified losses and a portion of deferred tax assets. 
      • Tier 1 (Core) Capital / Average Total Assets: 
        • Tier I (Core) Capital as a percentage of adjusted tangible assets. This ratio is the first ratio utilized by the regulators as a base indicator of capital adequacy.  Not enough Tier I (Core) Capital will cause regulatory scrutiny, while too much Tier I (Core) Capital would indicate that a financial institution has not leveraged its capital effectively. 
      • Tier 1 (Core) Capital / Risk-Weighted Assets: 
        • Tier I (Core) Capital as a percentage of total risk weighted assets. This ratio takes the inherent balance sheet risk into consideration by risk weighting each asset category.  Those institutions with less risky assets require less risk-based capital. 
      • Total Borrowings / Total Deposits + Total Borrowings: 
        • Total level of borrowings (FHLB, FRB, unsecured, other) divided by total deposits and total borrowings 
      • Total Delinquencies / Total Loans: 
        • Total delinquent loans (30-89 & 90 + past due + nonaccrual loans) as a percentage of the total loan portfolio. This ratio measures the level of loans in the portfolio that have stopped making payments at the bank. 
      • Total Reciprocal Deposits / Total Deposits + Total Borrowings: 
        • Total level of reciprocal deposit accounts divided by total deposits and total borrowings 
      • Total Unrealized Securities Loss / Tier 1: 
        • Total Unrealized Securities Loss divided by Tier 1 Capital 
      • Transaction Accts: 
        • A demand deposit account subject to withdrawal of funds by check. 
      • Transaction Accts / Total Deposits + Total Borrowings: 
        • Total level of transactions accounts divided by total deposits and total borrowings  
      • Uninsured Deposits: 
        • Deposit balances held at an insured financial institution that are not covered by deposit insurance.  
      • Uninsured Deposits / Total Deposits: 
        • Total level of uninsured deposits divided by total deposits.  
      • US Agency Obligations:
        • Debt securities issued or guaranteed by U.S. government-sponsored enterprises (GSEs) such as Fannie Mae, Freddie Mac, or the Federal Home Loan Banks. 
      • US Agency Obligations / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to US agency debt securities. 
      • US Treasury Securities: 
        • Debt instruments issued by the U.S. Department of the Treasury and backed by the full faith and credit of the U.S. government. 
      • US Treasury Securities / Tier 1 + ACL: 
        • This is a concentration ratio, that displays the level or exposure of the institution’s capital levels (Tier 1 and the ACL) to US Treasury securities. 
      • Week 1: 
        • In the event of a liquidity run, this is the amount of cash that the institution can access and disperse over a one-week time horizon and remain solvent. Week 1 liquidity is defined as Day 1 liquidity plus the estimated collateral value of unpledged investments (which can be pledged or sold) an institution has on its balance sheet at any given time and the portion of an institution’s brokered and listing service deposit capacity (typically, 10% each) that it believes will be able to access within a one-week timeframe in a contingency funding scenario. 
      • Weighted Score: 
        • The weighted score of the select components to define the score displayed.   
      • Yield / Cost Spread: 
        • The difference between the yield on assets and the average cost of interest-bearing liabilities (interest income / average earning assets - interest expense / average costing liabilities). This ratio measures the difference between the earnings capacity of what is being lent out or invested, versus the cost of generating the funding. 
      • Yield on Earning Assets: 
        • Interest income as a percentage of average earning assets. This ratio measures the level of interest income that a financial institution generates.  The level of yield is a function of market interest rate levels and the mix of earning assets of the bank. 
      • Yield on Investments: 
        • Interest income from Investments as a percentage of average investments. This ratio measures the level of interest income from investments that a financial institution generates.  The level of yield is a function of market interest rate levels and the mix of investments of the bank. 
      • Yield on Loans: 
        • Interest income from loans as a percentage of average loans. This ratio measures the level of interest income from Loans that a financial institution generates.  The level of yield is a function of market interest rate levels and the mix of loans of the bank.