Bank Analysis School - September 2023

Internal Use Only

How Would You Rate Sunny State Bank?

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• Strong capital level relative to the bank’s risk profile.

• Satisfactory capital level relative to the bank’s risk profile.

• The level of capital does not fully support the bank’s risk profile (even if capital levels exceed regulatory and statutory minimums).

• Deficient level of capital relative to the bank’s risk profile. • Viability of the bank may be threatened. • Assistance from shareholder’s may be required.

• Critically deficient level of capital. • Viability of the bank is threatened and immediate financial support from shareholder’s is needed .

Internal Use Only

Learning Objectives Recap

Purpose

Definition

Ratios

Qualitative Considerations