I had a quick questions just out of curiosity. I came across this bank yesterday and noticed they don't report Risk-Based Capital; rather, they report Community Bank Leverage Ratio (CBLR). When you research small community banks that don't report their risk-based capital, do you manually compute it, or do you use the CBLR?
Thanks for reading, glad you enjoyed it. I use the CBLR. Banks with under $10 billion in assets aren’t required to report Risk-Based capital and most of them use the CBLR. CBLR for NSTS was 24.1% as of the most recent quarter so they are more than 2.5x the required minimum. I also use the Texas ratio which is Non-performing assets/(Tangible Common Equity + Loan loss reserves).
Clayton - I enjoyed the read!
I had a quick questions just out of curiosity. I came across this bank yesterday and noticed they don't report Risk-Based Capital; rather, they report Community Bank Leverage Ratio (CBLR). When you research small community banks that don't report their risk-based capital, do you manually compute it, or do you use the CBLR?
Looking forward to hearing your thoughts!
Thanks for reading, glad you enjoyed it. I use the CBLR. Banks with under $10 billion in assets aren’t required to report Risk-Based capital and most of them use the CBLR. CBLR for NSTS was 24.1% as of the most recent quarter so they are more than 2.5x the required minimum. I also use the Texas ratio which is Non-performing assets/(Tangible Common Equity + Loan loss reserves).
Great, thank you for the insight! I’ll keep those metrics in mind when I screen small banks.