Capital
Total Equity Capital
Also known as Total Equity
Total equity capital is the bank's net worth on a book basis — common stock, surplus, retained earnings, and accumulated other comprehensive income (AOCI). It is the first cushion that absorbs losses before depositors or the FDIC are exposed.
Formula
Schedule RC reports each equity component. Retained earnings accumulate undistributed profits over the bank's life; AOCI captures unrealized gains and losses on available-for-sale securities and certain hedges, which can swing equity sharply when interest rates move.
Why it matters
Equity capital is the buffer between losses and insolvency. Unlike the risk-based capital ratios, total equity is an unweighted book figure, so it moves directly with AOCI — which is why the 2022-2023 rate shock erased large slices of reported equity at securities-heavy banks even as their risk-based ratios looked stable.
How to interpret
Compare total equity to total assets (the equity-to-assets ratio) and to tangible common equity, which strips out goodwill and intangibles. A bank whose equity is propped up by goodwill or depressed by deep AOCI losses can look very different on a tangible basis.
Thresholds
| Range | Label | Interpretation |
|---|---|---|
| Growing via retained earnings | Strong | Equity building organically from profits. |
| Stable | Adequate | Equity roughly flat and supportive of the asset base. |
| Eroding from AOCI | Watch | Unrealized securities losses dragging book equity down. |
| Near zero / negative | Concern | Thin or negative equity is a direct insolvency signal. |
Worked example
Frequently asked
How is total equity different from CET1 capital?
Total equity is the book accounting figure. CET1 is a regulatory measure that starts from common equity and then deducts goodwill, certain deferred tax assets, and mortgage servicing rights above limits. CET1 is almost always lower than total equity.
Why did total equity fall at banks that were still profitable?
Accumulated other comprehensive income (AOCI) includes unrealized losses on available-for-sale securities. When rates rose in 2022, those losses cut AOCI and therefore total equity, independent of the income statement.
Sources
- FFIEC Call Report Schedule RC (Balance Sheet, Equity Capital)
See Total Equity across 4,335 US banks
BankRegReports ranks every FDIC-insured institution by Total Equity, refreshed quarterly within 48 hours of FFIEC release.