How are your camels?

How are your camels?

Are you aware that U.S. regulators use a rating scorecard to determine the soundness of financial institutions?  Their system is not new to the industry, but the specifics – heretofore not widely known – are an acronym.  CAMELS stands for:

 Capital adequacy:  sizing up the cushion against losses.

Asset quality:  the likelihood that loans will pay off.

Management capability:  reflecting controls and strategy.

Earnings quality:  measuring sources, steadiness of profit.

Liquidity adequacy:  how long a bank can go without raising money in the market.

Sensitivity to market risk:  whether a market shock would create outsized losses.

At Brumbaugh Appraisals, we can assist you in keeping your camels strong.    Asset quality and the likelihood that a loan will pay off are largely a function of the loan-to-value ratio.   The collateral used to secure a loan is critically important in keeping a non-performing loan above water.    Accurate, defensible, and impartial machinery and equipment (FFE and PPE) appraisals are what we do.

To learn more about how we can help give your business the best possible financial standing, please give us a call at 919-870-8258 or fill out our contact form. We welcome the opportunity to talk with you about collateral appraisals for new loans or to review existing loans.