Credit Evaluation School eBook

Bank 4

Capital • Tier 1 Leverage Capital – 22.5% Asset Quality • ACI Ratio – 58.9% • Prior exam – 55.2% • Loans to Assets - 82% • ACL to Total Loans – 0.9%

Management • Credit underwriting and administration practices needs improvement. • Inadequate risk identification process • Multiple downgrades from management’s internal rating. • Multiple loan related violations Earnings • ROAA – 2.7% (core earnings)

• State average this exam – 16.5%

• Considered slightly underfunded

Bank 5

Capital • Tier 1 Leverage Ratio – 8.7% Asset Quality • ACI Ratio – 179.2% • Prior exam – 175.4%

Management • Under an MOU for two consecutive exams. • No loan related violations. • Risk identification practices were appropriate. • Credit underwriting and administration practices need improvement. Earnings • ROAA – 0.5% (core earnings)

• State average this exam – 17.9% • Adversely classified items are primarily contained within the Substandard classification. • Concentration in ag lending represents 574% of total capital. • Concentration monitoring needs improvement. • ACL is fully funded