Published April 6, 2026 · Updated quarterly
CAMELS Rating System Explained — How Federal Regulators Grade Your Bank
CAMELS is the confidential rating system used by the FDIC, Federal Reserve, and OCC to assess the safety and soundness of every US bank. Each bank is scored 1 (strongest) to 5 (weakest) across six dimensions. Because CAMELS ratings are never made public, depositors must rely on publicly available financial data to assess their bank's health.
The Six Components of CAMELS
C — Capital Adequacy
Does the bank have enough capital to absorb losses? Regulators look at the Tier 1 capital ratio (core equity capital divided by risk-weighted assets). A ratio above 8% is considered "well-capitalized" by FDIC standards. Below 4% is "critically undercapitalized" and triggers mandatory corrective action.
Public proxy: Tier 1 capital ratio is publicly available in FDIC Call Reports. Our Bank Health Score weights this at 35%.
A — Asset Quality
Are the bank's loans being repaid? Examiners look at the nonperforming loan ratio (loans 90+ days past due or on nonaccrual), loan concentrations (too many loans in one sector like commercial real estate), and the adequacy of loan loss reserves.
Public proxy: The nonperforming loan ratio is publicly reported. Our score weights this at 30% (inverted — lower NPL = higher score).
M — Management
Is the bank well-managed? This is the most subjective component. Examiners evaluate the board of directors, management competence, internal controls, compliance with regulations, strategic planning, and risk management culture. This assessment requires on-site examination.
Public proxy: None directly available. This is the one CAMELS component that cannot be replicated from public financial data. However, poor management eventually shows up in the other five metrics.
E — Earnings
Is the bank profitable? Examiners analyze return on assets (ROA), return on equity (ROE), net interest margin, and the quality and sustainability of earnings. A consistently profitable bank can rebuild capital after losses.
Public proxy: Return on assets is publicly reported. Our score weights this at 10%.
L — Liquidity
Can the bank meet deposit withdrawals and other obligations? Examiners evaluate the bank's cash and liquid assets relative to deposits, its access to funding sources (Fed discount window, FHLB advances), and its contingency funding plan. The 2023 failures of Silicon Valley Bank and Signature Bank highlighted how quickly liquidity can evaporate.
Public proxy: The liquidity ratio (liquid assets / total deposits) is publicly available. Our score weights this at 25%.
S — Sensitivity to Market Risk
How exposed is the bank to interest rate changes, foreign exchange movements, or commodity price swings? Examiners assess the bank's interest rate risk management — does its balance sheet hold up if rates rise or fall sharply? This component became critical when rising rates in 2022-2023 caused massive unrealized losses in banks' bond portfolios.
Public proxy: Some sensitivity data is in Call Reports (securities marked-to-market, held-to-maturity portfolio), but the full assessment requires internal modeling data.
CAMELS vs. Bank Health Score
| Dimension | CAMELS (Regulator) | Bank Health Score (Public) |
|---|---|---|
| Capital | Full internal capital analysis | Tier 1 capital ratio (35%) |
| Asset Quality | Loan review + concentrations | NPL ratio (30%) |
| Management | On-site qualitative assessment | Not measurable from public data |
| Earnings | Full profitability analysis | Return on assets (10%) |
| Liquidity | Funding sources + contingency | Liquidity ratio (25%) |
| Sensitivity | Internal risk models | Partially reflected in other metrics |
| Availability | Confidential — federal law | Public — free for all depositors |
The FDIC Problem Bank List
Banks with CAMELS composite ratings of 4 or 5 are placed on the FDIC's "Problem Bank List." The list itself is confidential, but the FDIC publishes the total number of problem banks in its Quarterly Banking Profile. Being on the list does not mean a bank will fail — many problem banks return to health with corrective action.
How to Check Your Bank
Since CAMELS ratings are confidential, the best public alternative is to check your bank's financial metrics directly. Our bank search tool lets you look up any of the 3,960 FDIC-insured banks we track and see their Health Score, capital ratios, loan quality, and liquidity — the same data regulators use for four of the six CAMELS components.
Frequently Asked Questions
CAMELS stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk. Each component is rated on a scale of 1 (best) to 5 (worst), and a composite rating is assigned. Banks rated 1 or 2 are considered satisfactory. Banks rated 4 or 5 are placed on the FDIC Problem Bank List.
No. CAMELS ratings are confidential by federal law (12 CFR Part 309). Individual bank CAMELS ratings are never disclosed to the public. However, the FDIC publishes aggregate statistics, including the number of "problem banks" (those rated 4 or 5). As of Q4 2024, the FDIC reported 66 problem banks. You can use publicly available FDIC financial data to create a proxy assessment, which is what our Bank Health Score does.
CAMELS ratings are assigned by trained federal bank examiners who conduct on-site inspections, interview management, and review confidential internal documents. Our Bank Health Score uses only publicly available FDIC Call Report data (capital ratios, loan quality, liquidity, profitability). CAMELS includes a qualitative "Management" assessment that cannot be replicated from public data. Our score is a quantitative proxy that covers 5 of the 6 CAMELS components.
Banks rated 3 receive increased regulatory attention. Banks rated 4 or 5 are placed on the FDIC Problem Bank List and face formal enforcement actions: cease-and-desist orders, required capital injections, restrictions on growth, and in severe cases, closure. Regulators work with bank management to correct problems before failure becomes necessary.