Risk Measurement

IDC Financial Publishing, Inc. identifies risk measurement with several financial ratios, assigns a weight factor to each based on its relative importance to the health of the institution, and then combines the overall view into a numeric summary rank. Ranks range from 1 (the lowest) to 300 (the highest).

Since 1985, we have compiled and stored all the risk measurement data necessary to analyze and rank financial institutions in our database. With this, we can provide historical information for any given institution back to 1985. This makes it more cost-effective for customers requesting history on their institution or peer group.

IDC's unique method of evaluating financial institutions is based on the acronym CAMEL-Capital adequacy, Asset quality, Margins, Earnings returns, and Leverage/Liquidity. Many analysts ignore the "M" in CAMEL while IDC determines management's performance based on margins. One number summary ranks reflect each institution's overall quality.

In addition to performing a CAMEL ratio analysis, IDC calculates the Net Operating Profit After-tax Return on Equity (NOPAT ROE). The NOPAT ROE equation differs from the traditional ROE equation by not subtracting the cost of funding so early in the analysis. The NOPAT ROE equation allows managers to truly compare operating and financial returns with their peers.

IDC Financial Publishing, Inc. provides risk measurement databases for commercial banks, bank holding companies, savings institutions, and credit unions.