Follow on Google News News By Tag Industry News News By Place Country(s) Industry News
Follow on Google News | Issues for understanding a small community Bank- Keyfunds.com--- Robin TrehanThere are multitudes of issues to work on while analyzing a bank. They can be broken down to Asset Quality, Liquidity, Earnings, Capital, Sensitivity to Market Risk, Management.
By: credit capital funding. Asset Quality- Distribution and Severity of Classified Assets. Substandard, Doubtful, or Loss. Asset Quality of adversely classified assets, nonaccruals, and concentration of risk inherent in the loan portfolio. 1- Level of nonaccrual loans to total loans 2- ALLL ( Allowances for loan and Lease losses) 3- Volume and Nature of special mention classification 4- Past Due and Nonaccrual loans to total loans 5- Lending policies and credit administration procedures 6- Asset Class and its concentration within an industry or segment Read More Liquidity- 1- Volatility of deposits 2- Frequency and level of borrowing 3- Technical competence relative to structure of liabilities 4- Availability of assets readily convertible to cash. 5- Access to money markets or other ready source of funds 6- Overall effectiveness of asset liability management strategies 7- Net loans and leases to deposits and net non core dependence ratios Earnings- 1- Ability o cover losses and provide adequate capital 2- Earning trends, and the quality and composition of net income 3- Reliance on interest sensitive funds 4- Adequacy of provisions to the ALLL 5- Net Income to Average Assets 6- Net Interest income to Average Assets. Net Interest Income can be adversely affected by increasing level non-accrual loans, loan modifications, declining yields on loans and higher cost of funds 7- Overhead Expense to Average Assets 8- Provisions to Average Assets Capital 1- Class of Assets and its concentration within a business or segment 2- Exposure to market conditions and its concentration. 3- Volume of Severity of risk assets 4- Growth Experience and plans 5- Earning retention 6- Tier 1 Leverage capital to Average Total Assets 7- Tier 1 risk based capital 8- Total risk based capital Sensitivity to Market Risk 1- Changes in social, economic and political condition 2- Sensitivity of earnings or the economic value of its capital to the adverse changes in interest rates 3- Ability of management to identify, measure, monitors, and control exposure to market risks 4- Nature and complexity of interest rate risk exposure arising from non trading positions Management 1- Education and experience 2- Technical competence. 3- Leadership and administrative ability 4- Compliance with banking regulation and statutes 5- Adequacy and compliance with internal policies 6- Depth and succession 7- Ability to plan and respond to changing circumstances 8- Quality of internal controls and operating procedures More information http://keyfunds.com End
Account Email Address Account Phone Number Disclaimer Report Abuse Page Updated Last on: Jan 25, 2014
|
|