#credit risk
Articles tagged with "credit risk"
FDIC Bank Failure Data: What History Tells Us About Risk
Between 2008 and 2012, the FDIC closed 465 banks. At the peak, 2010 alone, 157 institutions failed, carrying about $92 billion in combined assets …
CECL vs. ALLL: What Expected Credit Loss Means for Reserves
Walk into any community bank credit committee today and you will find at least one person who still calls it the ALLL. That is …
Allowance Coverage Ratio: How to Judge Reserve Adequacy
A bank can hold $50 million in reserves and still be dangerously thin. The dollar figure is nearly meaningless without context: specifically, what those …
How to Read Schedule RC-C: The Loan Portfolio Breakdown
At the average community bank, commercial real estate loans now represent roughly 40–45% of total loans, and in many $500M–$2B institutions that number runs …
Nonperforming Loans and the NPL Ratio Explained
At the peak of the 2008 credit cycle, the industry-wide noncurrent loan rate hit 5.4%, nearly one in twenty loan dollars had stopped performing. …
What Is the Net Charge-Off Rate? A Bank Credit Guide
In the fourth quarter of 2009, the net charge-off rate for U.S. commercial banks reached 3.3% annualized, a level that would be catastrophic for …
Reading Bank Loss Reserves: Provision, Allowance and Adequacy
In Q1 2020, JPMorgan Chase posted an $8.3 billion provision for credit losses, of which $6.8 billion was a reserve build, up from roughly …
The Texas Ratio as a Failure Warning: Origins and Limits
The Texas Ratio is one of the simplest and most reliable early-warning signals for bank failure. Learn what it measures, how to calculate it …