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Financial Ratios

Kroll Bond Ratings Statistic/Ratio Definitions

Statistic/Ratio Description
TOTAL ASSETS Total consolidated assets reported in dollars (millions or thousands depending on the service used).
EQTY CAPT Total equity capital shown in dollars (millions or thousands depending on the service used).
INC QTR (000) Net income reported for the current quarter;
i.e., fourth quarter net income would only be for the final quarter and not for the full year.
INC CUM (000) Cumulative net income; i.e., cumulative net income for the September rating period (September 30) would include income for the first nine months.

Liquidity Ratios

Statistic/Ratio Description
TI-VL/ASTS Temporary investments minus volatile liabilities divided by average assets. PCT is the bank's peer group percentile ranking for the ratio. Temporary investments: Interest bearing bank balances due from depository institutions, securities with a maturity of one year or less, federal funds sold, and securities purchased under agreements to resell. Volatile liabilities: Time deposits greater than $250,000, interest bearing foreign deposits, and other borrowed money with a maturity less than one year and federal funds purchased, Securities sold under agreement to repurchase.
A ratio of zero or better is preferable.
LNS/ASTS Ratio of total loans, net of unearned income to assets. A smaller number indicates greater liquidity.
CDS>100/AST Time certificates of deposits of $100,000 or more plus open-account time deposits of $100,000 or more divided by total assets. A smaller number indicates greater liquidity.
SEC>5 YR/AST Fixed rate debt securities with a remaining maturity of over five years divided by total assets. A smaller number indicates greater liquidity.
BROKERED DEP / TOTAL DEP Total brokered deposits divided by total deposits. A smaller number indicates the use of more stable funding sources for deposits.

Asset Quality Ratios

Statistic/Ratio Description
NPA /
ASSETS
Nonperforming assets include loans past due 30 to 89 days and still accruing, loans past due 90 days or more and still accruing and loans placed on nonaccrual divided by total assets. PCT is the bank’s percentile ranking for its ratio within its peer group based on asset size shown in the front of the service. A ratio close to zero is ideal.
NPA /
CAP.
Nonperforming assets as defined in the above definition divided by total equity capital. A ratio close to zero is ideal.
LOSS RSRV /
AST
The bank's reserve coverage ratio. The ratio of a bank's reserve for loan and lease losses to its total amount of total assets. A larger number is preferable.
LOSS RSRV /
NPA
The ratio of reserves for loan and lease losses to total nonperforming assets. A larger number is preferable.
CHG-OFF /
ASTS
Ratio of loans charged-off to total assets.
CONSTRUC &
LAND LNS /
TOTAL LNS
Construction and land development loans divided by total loans and leases. The higher the ratio, the larger the bank’s concentration in potentially risky loans.
RES R.E.
LNS /
TOTAL LNS
Residential real estate loans divided by total loans and leases.

Capital Adequacy Ratios

Statistic/Ratio Description
TIER 1 / R. AST Measures the bank's "Tier 1" capital relative to its risk-weighted assets and shows the bank's percentile ranking among its same-sized peers. Although each regulator has its own slightly different definition of "tier one" capital, it is generally thought of as: 1) the bank's common stock and related accounts (such as retained earnings); 2) qualifying non-cumulative perpetual preferred stock and related surplus, and; 3) minority interests in the equity accounts of unconsolidated subsidiaries less any intangibles (such as goodwill). The bank's risk-weighted assets measure the bank's assets, as well as the "credit equivalence" of assets.
T.CAPT / R.
AST
Measures the bank's total capital in relation to its risk-weighted assets. The numerator, total capital, is defined as "Tier 1 capital" plus "Tier 2" capital. Tier 2 capital, also known as supplementary capital, is generally defined as: 1) the bank's allowance for loan and lease losses (up to 1.25% of risk-weighted assets); 2) all remaining perpetual preferred stock not included in tier one capital; 3) "hybrid capital instruments" and "mandatory convertible debt securities", and; 4) term subordinated debt and intermediate- term preferred stock.
TIER 1 /
LEVERAGE
Ratio measures the bank's total Tier 1 capital, defined as total capital less intangibles, divided by the average assets less intangibles held by the bank during the current period. Please note that the leverage ratio that KBRA calculates uses the regulatory definition of Tier 1 Capital. i.e., it does not reflect unrealized gains or losses on securities classified as "available for sale.
(EQTY –
INTANG ASTS)
/ TOTAL ASTS
Total equity capital minus intangible assets (goodwill and other intangible assets) divided by total assets. A larger ratio is preferable.

Earnings Performance Ratios

Statistic/Ratio Description
INT INC Annualized interest income placed on a tax-equivalent basis. Categories included in interest income are interest and fee income on loans in domestic and foreign offices, income from lease financing receivables, interest income on balances due from depository institutions, interest and dividend income on securities, income from assets held in trading accounts, and interest income on fed funds sold and securities purchased under agreements to resell.
INT EXP Annualized interest expense. Categories included in interest expense are: interest on transaction and non-transaction accounts held in domestic and foreign offices, interest on demand notes issued to the U.S. Treasury and other borrowed money, interest on mortgage indebtedness and obligations under capitalized leases, interest on subordinated notes and debentures, and the expenses associated with fed funds purchased and securities sold under agreements to repurchase.
NET INT INC Annualized net interest income placed on a tax equivalent basis. PCT is the bank's peer percentile ranking for the ratio.
NON INT INC Annualized noninterest income includes deposit service charges, trading commissions, foreign exchange trading and other foreign transaction income, and other income. PCT is the bank's peer percentile ranking for the ratio.
PROV LOAN
RESER
Provisions made to the loan-loss reserve as a percent of assets.
PRE TAX INC Pretax income placed on a tax equivalent basis shown as a percent of assets.
NET INT
MARGIN
Annualized net interest income divided by average earning assets. A larger ratio is preferable.
NET INCOME Net income (cumulative) as a percent of total assets. A higher ratios is preferable.
NET INC
/ CAP.
Annualized income divided by total equity, also known as return on equity, ROE.

Loan Types % of LNS

Statistic/Ratio Description
COM & IND Commercial and Industrial loans divided by total loans.
PER LNS Personal loans (consumer loans) divided by total loans.

Other Ratios

Statistic/Ratio Description
NPA CHG Quarterly change in reported nonperforming assets.
AST CHG Change in total assets from the year ago period
EQTY CAP CHG Change in total equity capital from the previous quarter.
CORE DEP
CHG
Change in core deposits from the previous quarter. Core deposits are defined as total deposits minus time deposits greater than $100,000.
KBRA RATINGS KBRA Ratings are shown for the several past year-end periods and the most recent five quarters.

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