Institutional Risk Analytics - Compendium of Bank Risk Coverage List

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IRA Compendium of Bank Risk Benchmarks
Frequently Asked Questions

What are the specific measures in the current IRA Compendium?
The following metrics are used in the Compendium of Bank Risk:

Bank Performance Metrics

Institution Type: Bank unit or Bank Holding Company (“BHC”).

Total Assets: The total assets of the subsidiary banks in a given BHC or unitary thrift. As reported in CALL/TFR filed with the FDIC.

Lending: Total loans and leases of the bank unit or the individual bank subsidiaries of the BHC.

Efficiency: Key bank operations ratio defined by the FDIC, describes the cost of acquiring each additional $1 of revenue.

Rating: Actual default rate for current quarter expressed as bond rating equivalent using industry break points. Computed and assigned by IRA. This rating should generally align with the “internal target rating” for the bank’s credit operations business model.

Defaults: Observed loan and lease defaults in basis points versus the reported loan and lease base.

Loss Given Default (“LGD”): Percent loss after default per dollar lent. Compares current period defaults with recoveries on an annualized basis.

Maturity: Weighted average maturity in years for the aggregate loan and lease portfolio. Note: The Office of Thrift Supervision does not release portfolio or aggregate maturity data for thrifts to the FDIC.

Exposure at Default (“EAD”) = Amount in aggregate which obligors could borrow immediately prior to default expressed as % of existing credit available. Computed by analyzing as-reported unused lending commitments.

Economic Capital Metrics

Counterparty Rating: IRA reports four ratings bands based upon IRA’s proprietary Economic Capital simulation, divided into “Excellent,” “Good,” “Marginal” and “Stressed” buckets. Rating Y1 shows prior year measure.
RAROC: Risk Adjusted Return On Capital. Also known as Return On Economic Capital (ROEC). Computed using IRA’s Economic Capital estimate and the financial performance of the subject bank unit or BHC subsidiaries. RAROC Y1 shows prior year.
Economic Capital: Standardized, fully-stressed EC simulation computed by IRA to enable direct comparisons between institution risk management strategies. Uses calculations, risk weightings and Maximum Probably Loss estimates for lending, trading and investment activity components of EC. EC Y1 shows prior year.
Risk-Based Capital (“RBC”): The regulatory capital measure as reported by the institution to the FDIC. RBC Y1 shows prior year.
EC to RBC: Ratio of Economic Capital to RBC. ECtoRBCY1 shows prior year.
Tier-One Risk-Based Capital: The regulatory capital measure as reported by the institution to the FDIC. Tier 1 Y1 shows year before.
EC to Tier One RBC: Ratio of Economic Capital to Tier 1 RBC. ECtoTier1 Y1 shows prior year.

Aggregate Non-Performing Loan Survey Data Added May-2008!

Total Assets
Total Loans and Leases
Interest Income, YTD
Net Defaults
Default Recoveries (Net Default + Recoveries = Gross Defaults)
Non-Accural Loans
Reposessions
30-89 Day Non-Accural Assets
90+ Day Non-Accrual Assets
Total Non-Accrual Assets
30-89 Day, Listed Available for Sale (A.F.)
90+ Day, Listed Available for Sale (A.F.)
Non-Accrual Assets, Listed Available for Sale (A.F.)
All data reported for the aggregate of each covered institution.

Will additional measures be added to the product?
Yes. IRA continually collects feedback and evaluates what areas require analytical emphasis to deliver improved transparency about banking institutions. All compendium subscribers benefit as the library of ratings and metrics evolves.

Are custom studies and reports available?
Yes. IRA performs custom analysis and report production as part of our consulting services. Please contact us regarding your needs.

Why is the Compendium only available in PDF?
The IRA Compendium of Bank Benchmarks is our entry-level offering in the IRA Bank Monitor family of products. After reviewing many alternatives, PDF's were found to be the most univerally interoperable document format for distributing static reference information.

Are there more interactive versions of IRA Bank Monitor?
Yes. For users who need to do research and data mining to support manipulation intensive downstream work, IRA offers a fully interactive IRA Bank Monitor workstation product that includes online viewing, searching and Excel download capabilities.

For even more customized data pipeline workflow functions, the IRA product line also includes web services component versions of IRA Bank Monitor that deliver structured datasets in multiple consumption formats. We also offer data feeds and client-site implementations of the system.

Who owns IRA's data and analytics?
IRA has full and independent rights to the data we use to power the IRA Bank Monitor system. Our analytics are proprietary, the result of our multi-year R&D investment looking at institutional risk with "fresh eyes". IRA first started publishing articles on bank risk based on our analytics starting in 2003 in our weekly newsletter The IRA Analyst. At that time our analytical approach was considered maverick and controversial because, unlike all other models of that era, our tools identified business hazards that until 2007 were thought to be impossible.