CAMELS rating: CAMELS is the confidential supervisory rating an examiner assigns a bank after an examination, on a scale of 1 to 5.
Where it comes from
Six components: capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk. Each is rated 1 to 5 and a composite is assigned. A 1 or a 2 is satisfactory, a 3 draws supervisory attention, and a 4 or a 5 means the bank is in real trouble.
How to read it
No bank’s CAMELS rating is public. It is confidential supervisory information and banks are not permitted to disclose it, so anything presented as a bank’s CAMELS rating is somebody’s estimate. What is public is the call report underneath it, and four of the six components are largely readable from it.
The common mistake. Believing a published score. A CAMELS style composite built from public data is a model of the rating, not the rating, and it should be labelled that way every time it is shown.
Go deeper
- CAMELS ratings explained
- BankingLens pricing and what a subscription adds: percentile rank against the bank’s own FFIEC peer group, fourteen quarters of trend, and the flags an examiner reaches for first.
See also. Call report, FFIEC peer group, Texas ratio, Well capitalized.
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