BankProspector - Understand the Data

Understanding the Data

BankProspector pulls from publicly available regulatory data. Here’s a quick primer on the key terms and metrics you’ll see throughout the platform.

Non-Performing Loans (NPL)

A non-performing loan is generally any loan that is 90+ days past due or has been placed on nonaccrual status. In BankProspector, the NPL total for a portfolio equals the 90+ Days late amount plus the Nonaccrual amount.

NPL Ratio

The NPL-to-Loans ratio tells you what percentage of a bank’s portfolio is non-performing. Portfolios under 6% are generally considered healthy. Higher ratios can indicate stress — and potential deal opportunities.

REO (Real Estate Owned)

REO refers to properties that a bank has taken ownership of, typically through foreclosure. Banks report five types of REO: Residential, Commercial, Multifamily, Construction, and Farmland.

Capital Ratios

• Tier 1 Leverage: Core capital as a percentage of total assets. The minimum is typically 4%.
• Tier 1 Risk-Based Capital: Core capital as a percentage of risk-weighted assets.
• Total Risk-Based Capital: All qualifying capital (Tier 1 + Tier 2) as a percentage of risk-weighted assets.

Banks with declining capital ratios may be under regulatory pressure, which can motivate them to sell distressed assets.

ALLL (Allowance for Loan and Lease Losses)

ALLL is the bank’s reserve set aside to cover future losses on loans. Think of it as a rainy-day fund for bad loans.

Loan Loss Provisions

While ALLL is the total reserve, Loan Loss Provisions are the amount added to (or subtracted from) ALLL each quarter. Rising provisions can signal that the bank expects more losses ahead.

Note Sale Indicators

These metrics — including Held for Sale (HFS) loans and Nonaccrual Loans Sold — help you identify banks that have a history of selling or are actively positioning loans for sale. A bank reporting Nonaccrual Loans Sold is one that has demonstrated willingness to trade.

Charge-Offs

A charge-off is when a bank writes off a loan as a loss. High charge-offs in a specific category can indicate that the bank is actively cleaning up its portfolio — another potential signal for deal opportunities.

Held for Sale (HFS)

When a bank moves a loan from “held for investment” to “held for sale,” that’s a strong signal that they intend to dispose of it. The HFS metrics in Note Sale Indicators track these loans.

💡 Tip: Don’t worry about memorizing all of these terms right away. As you use BankProspector, they’ll start to make sense in context. The info icons throughout the platform also provide quick definitions.