>>Banking Terms
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Real-Estate Owned

If a bank or a credit union makes a loan and a borrower fails to meet the agreed mortgage payments on that loan, the property is put into a foreclosure auction. If the property does not meet the bank or credit unions base offer price at auction the property becomes the possession of the bank [...]

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Total Assets

Total assets of a bank is the sum total of all the long term and current assets owned by the bank.  The total assets of any bank are a measure of its capability to meet its liabilities in the normal course of business, and also when the bank ceases to be a going concern. Long [...]

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Other Intangible Assets

Other intangible assets (excluding goodwill) for banks and credit unions are those assets which are not physically present, yet provide astounding long term benefits to the institution. For intangible assets to be recognized on a bank's balance sheet, it is imperative that the intangible asset must have a legal benefit. The most common form of [...]

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Tier 1 Capital

A bank's Tier 1 Capital is judged by regulators to represent the bank’s core capital. The FDIC states that: "Tier 1 Capital includes: Common stock, undivided profits, paid-in-surplus; Non-cumulative perpetual preferred stock; Minority interests in consolidated subsidiaries; Minus All intangible assets (with limited exceptions); Identified losses; Deferred tax assets in excess of the limit set [...]

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Total Deposits

Total Deposits is a term included in the balance sheet of a bank. To a common person, the word deposit most often implies the act of placing your money in the safety of a bank. When calculating the Total Deposits from a bank’s perspective, various kinds of deposits are taken into consideration. These are added [...]

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Perpetual Preferred Stock

Perpetual Preferred Stock is issued with no set maturity date for when the shareholder shall receive a return of their invested principal.  The dividends on Perpetual Preferred Stock are paid indefinitely, while the issuers are able to redeem the stock at any instant in time from the shareholder.

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FDIC Office Deposit Types

US Office Deposits US bank deposits that are collected in domestic branches and operations (US Based). These deposits are insured by the FDIC. US banks that only have domestic operations file their call reports under FFIEC 041. Foreign Office Deposits Deposits that are collected in foreign branches of US banks or their operations outside of [...]

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Total Bank Equity Capital

Total Bank Equity Capital consists of retained earnings, common and perpetual preferred stock, and other accumulated income but does not include non-controlling (minority) interest in consolidated subsidiaries (if you did include this you would have Total Equity Capital). Total Bank Equity Capital in simple terms is a broad measure of Equity Capital that does not [...]

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Intangible Assets – Goodwill

Goodwill is an intangible asset for both banks and credit unions, and can be most easily explained as an asset which can’t be invested or generate any revenue for the business. It is calculated by deducting the total purchase price of the assets as compared to their actual market value. Whenever a bank, or credit [...]

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Non-Performing Loans

A Non-performing loan is a loan where the borrower has failed to make the agreed upon scheduled payments based on the loan agreement. In simple terms, a loan that is nearing a default or is already defaulted is referred to as a non-performing loan. After the loan reaches the non-performing state, the probability of its [...]

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