Supervision & Ratings
CAMELS Rating
Also known as CAMELS
CAMELS is the supervisory rating system examiners use to grade a bank's safety and soundness across six components — Capital, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk — on a 1 (best) to 5 (worst) scale.
Formula
Each component is scored 1-5 and rolled into a composite, also 1-5. The official rating is confidential and assigned by examiners, but the underlying components are grounded in Call Report data — capital ratios, asset quality, earnings, and liquidity — which can be estimated publicly.
Why it matters
The CAMELS composite drives supervisory consequences: deposit-insurance assessment rates, examination frequency, enforcement, and approval of expansion. A 1 or 2 is satisfactory; a 3 invites heightened supervision; 4 or 5 signals serious problems and likely enforcement action.
How to interpret
Because official ratings are confidential, analysts build a CAMELS-style scorecard from public Call Report metrics. Read the component picture, not just a single grade: a bank can be strong on capital yet weak on earnings or liquidity, and the weakest component often drives the supervisory response.
Thresholds
| Range | Label | Interpretation |
|---|---|---|
| Composite 1 | Strong | Sound in every respect; minimal supervisory concern. |
| Composite 2 | Satisfactory | Fundamentally sound with modest weaknesses. |
| Composite 3 | Watch | Weaknesses warranting heightened supervision. |
| Composite 4-5 | Concern | Serious-to-critical problems; enforcement likely. |
Worked example
Frequently asked
What do the letters in CAMELS stand for?
Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk. Each is scored 1 to 5 and combined into a composite rating.
Are CAMELS ratings public?
No. The official rating assigned by examiners is confidential supervisory information. However, most components derive from public Call Report data, so analysts can construct a close CAMELS-style scorecard.
Sources
- FFIEC Uniform Financial Institutions Rating System (UFIRS)
- FFIEC Call Report (component data)
See CAMELS across 4,335 US banks
BankRegReports ranks every FDIC-insured institution by CAMELS, refreshed quarterly within 48 hours of FFIEC release.