FDIC Bank Ratings: The CAMELS System and How to Check Your Bank

FDIC bank ratings under the CAMELS system are the confidential 1-to-5 scorecards that federal regulators assign to every bank and credit union in the United States, grading each institution on six components of financial health. You will never see your own bank’s rating — federal law prohibits its disclosure — but the same public financial data examiners use to build the rating is available to you, and knowing what CAMELS measures tells you what to look at.

What CAMELS Stands For

CAMELS is an acronym for the six areas regulators evaluate: Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk. The formal name is the Uniform Financial Institutions Rating System, and it has been in use since 1979, when the Federal Financial Institutions Examination Council recommended it for federally supervised banks and thrifts.¹ The system originally used five components (CAMEL); the “S” for market risk sensitivity was added later.

Four federal agencies use the framework. The FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency examine banks and savings associations, and the National Credit Union Administration applies the same six-component approach to credit unions.² Each institution receives a score on each of the six components plus a composite rating reflecting the examiner’s overall judgment.

What Each Composite Rating Means

The composite is not a simple average of the six component scores. Examiners weigh the components together, and a bank with one weak area can still earn a solid composite if the rest is strong. Here is how the five composite levels are defined:³

1 — Sound. Strong in virtually every respect. Any weaknesses are minor and can be handled through normal board oversight. Least supervisory attention required.
2 — Fundamentally sound. Moderate weaknesses that management is capable of correcting. Generally no individual component is rated worse than 3.
3 — Supervisory concern. Weaknesses range from moderate to severe. Failure is unlikely but the bank is more vulnerable to stress. Regulators step up monitoring.
4 — Unsafe or unsound. Serious financial or managerial problems that could impair viability without corrective action. Real possibility of failure.
5 — Critical. Extreme problems and failure is highly probable without outside help. Weaknesses threaten the deposit insurance fund.

What the Six Components Measure

Capital Adequacy

Capital is a bank’s cushion against losses. When loans go bad or investments lose value, capital absorbs the hit before depositors are touched. Federal rules set several minimum capital ratios: a common equity tier 1 (CET1) ratio of at least 4.5 percent of risk-weighted assets, a tier 1 ratio of 6 percent, a total capital ratio of 8 percent, and a basic leverage ratio of 4 percent.⁴ Clearing the minimums does not automatically produce a strong rating. Examiners also look at whether capital is sized appropriately for the specific risks the bank has taken.

Asset Quality

A bank’s assets are mostly its loans and investments. This component measures how likely those assets are to be repaid. Examiners look at the volume and trend of problem loans, the severity of classified assets, and whether loan loss reserves are large enough to cover expected defaults.⁵ Loan concentrations also matter: a bank heavily exposed to one industry or region is more vulnerable to a downturn in that sector. Underwriting standards, collection practices, and early identification of problem loans all feed the score.⁶

Management

This is the most subjective component and arguably the most important. A well-run bank with mediocre numbers is in a better position than a poorly managed bank with strong ones, because those strong numbers will not last. Examiners evaluate the board and senior leadership, internal controls, and how management responds when problems are identified.

Information technology and cybersecurity practices factor directly into the management rating. The FDIC assigns a separate IT rating using a specialized framework and folds that assessment into the overall management score.⁷ Weak cyber defenses show up in the composite even if the financial ratios look fine.

Earnings

Profitability funds operations, builds capital, and pays for growth. Examiners assess not just whether a bank is profitable today but whether earnings are sustainable and high quality. A bank generating most of its income from volatile trading gains gets less credit than one with a steady stream of interest income from a diversified loan portfolio.⁵ Key metrics include net interest margin (the gap between what a bank earns on loans and pays on deposits), return on assets, and the trend of net income over time. Erratic swings, one-time gains, or a pattern of declining income pull the score down.

Liquidity

Liquidity is whether a bank can meet its obligations as they come due without selling assets at a loss. Even a profitable, well-capitalized bank can fail if it runs out of cash at the wrong moment. Examiners review the mix of liquid assets, the stability of funding sources, and how the bank would hold up if depositors withdrew faster than expected. Banks that lean on volatile funding like brokered deposits or short-term wholesale borrowing get more scrutiny. Examiners want to see contingency funding plans and backup liquidity, such as a borrowing line with the Federal Home Loan Bank.

Sensitivity to Market Risk

This component measures how much a bank’s financial condition could deteriorate if market conditions shift. For most community banks, interest rate risk dominates. A bank holding long-term, fixed-rate mortgages funded by short-term deposits gets squeezed when rates rise, because funding costs jump while loan income stays locked in.⁸ Examiners evaluate the bank’s models, its assumptions, and whether management stress-tests against severe scenarios. Banks with international exposure also have foreign exchange risk baked into this rating.

Why You Cannot Look Up Your Bank’s Rating

CAMELS ratings are confidential by law. Federal regulations make examination reports and their contents, including the rating, the property of the issuing agency and prohibit disclosure without written authorization.⁹ The OCC has warned that unauthorized disclosure by a bank can carry criminal penalties.¹⁰

The reasoning is simple. If depositors learned their bank had a rating of 4, many would pull their money immediately, which could turn a struggling-but-salvageable bank into a failed one. Confidentiality gives regulators room to work with the bank on corrective measures without triggering a panic. An interagency advisory has specifically flagged situations where insurance companies were requesting CAMELS ratings as part of underwriting; regulators asked that practice to stop.¹¹

Third-party “bank health” star ratings you see on financial websites are not CAMELS scores. They are independent estimates built from public data by private firms.

How to Evaluate Your Bank Without the Rating

Since the rating is off-limits, the next best move is to review the same categories of financial data examiners use. Several free federal tools make that possible.

BankFind Suite

The FDIC’s BankFind Suite lets you search for any FDIC-insured institution to verify its status, view branch locations, and review its history of mergers and ownership changes.¹² Start here to confirm your bank is actually insured and to get its FDIC certificate number, which you will need for deeper research.

Call Reports

Every insured bank files a quarterly Consolidated Report of Condition and Income, known as a Call Report, with its primary federal regulator. These are public records containing detailed balance sheets, income statements, loan portfolio breakdowns, and capital ratios.¹³ Call Reports are the raw numbers.

Uniform Bank Performance Report

The Uniform Bank Performance Report (UBPR) converts Call Report data into ratios, percentages, and trends that are easier to read. Its most valuable feature is peer comparison: every ratio appears alongside the average for similar-sized banks nationwide, with percentile rankings.¹⁴ Examiners use exactly this kind of peer comparison. You can pull a UBPR for any FDIC-insured bank through the FFIEC’s Central Data Repository at cdr.ffiec.gov by entering the bank’s name or FDIC certificate number.¹³

Quarterly Banking Profile

The FDIC’s Quarterly Banking Profile reports aggregate data on the industry: earnings, loan activity, asset quality trends, and the problem bank count.¹⁵ Less useful for a single bank; more useful for context. If industry-wide delinquencies are climbing, your bank is operating in a harder environment even when its own numbers look steady.

What to Look At

Focus on the metrics that map to CAMELS components. Capital ratios (CET1, tier 1, total capital, leverage) tell you how thick the cushion is. Non-performing loan ratios and net charge-off rates reveal asset quality. Net interest margin and return on assets reflect earnings strength. A bank falling well below its peer group on several of these measures at once deserves closer attention. UBPR percentile rankings make the comparison straightforward even if you are not a banking analyst.

The Problem Bank List

While individual ratings are secret, the FDIC does publish the number of “problem banks” each quarter — institutions with a composite rating of 4 or 5. As of the fourth quarter of 2025, 60 banks were on the list, about 1.4 percent of all FDIC-insured banks. That falls within the 1 to 2 percent range regulators consider typical for non-crisis periods.¹⁶ The names are not disclosed. During the 2008 financial crisis the list swelled past 800 institutions; the current figure is a fraction of that peak. The trend over time is one of the most-watched indicators of overall banking system health.

If a Bank Actually Fails

When supervisory tools fall short and a bank fails, the FDIC steps in as receiver. Insured deposits are protected up to $250,000 per depositor, per bank, per ownership category.¹⁷ In most cases the FDIC arranges for a healthy bank to acquire the failed institution and customers may not even notice a disruption; accounts, direct deposits, and automatic payments continue under the new bank’s name.

When no acquirer is available, the FDIC pays insured depositors directly. Notification goes out immediately after the bank closes, sent to the address on file.¹⁸ The FDIC has historically given depositors prompt access to insured funds, typically within a few business days. Balances above the insurance limit are a different matter. Those become unsecured claims against the failed bank’s remaining assets, and recovery is uncertain and slow. That is the strongest practical reason to know what your bank looks like on the metrics examiners care about, and to keep any deposits above $250,000 spread across insurance categories or institutions.

1
Federal Reserve. Overall Conclusions Regarding Condition of the Bank: Uniform Financial Institutions Rating System
2
National Credit Union Administration. CAMELS Rating System
3
FDIC.gov. Composite Ratings Definition List
4
eCFR. 12 CFR Part 324 Subpart B – Capital Ratio Requirements and Buffers
5
FDIC. RMS Manual of Examination Policies – Section 1.1 Basic Examination Concepts and Guidelines
6
National Credit Union Administration. Appendix A NCUA’s CAMELS Rating System (CAMELS) (Revised)
7
Federal Deposit Insurance Corporation (FDIC). 2022 Report on Cybersecurity and Resilience
8
FDIC Examination Policies Manual. Rate Sensitivity Expanded Analysis Procedures
9
eCFR. 12 CFR Part 309 – Disclosure of Information
10
Office of the Comptroller of the Currency. Supervisory Ratings and Other Nonpublic OCC Information: Statement on Confidentiality
11
Board of Governors of the Federal Reserve System (and other agencies). Interagency Advisory on the Confidentiality of the Supervisory Rating and Other Nonpublic Supervisory Information
12
FDIC.gov. Data Tools
13
FFIEC Central Data Repository. View or Download Data for Individual Institutions – FFIEC Central Data Repository’s Public Data Distribution
14
FDIC. Introduction to the Uniform Bank Performance Report (UBPR)
15
FDIC.gov. Quarterly Banking Profile
16
FDIC.gov. FDIC Quarterly Banking Profile Fourth Quarter 2025
17
FDIC.gov. Deposit Insurance – Understanding Deposit Insurance
18
FDIC.gov. When a Bank Fails – Facts for Depositors, Creditors, and Borrowers