Investopedia

Continue to Site »

Adversely Classified Asset

Filed Under »
Dictionary Says

Definition of 'Adversely Classified Asset'

A type of loan classification in which the loan or other asset is considered, to some degree, to be impaired. It is an asset that is considered by bank examiners to be of substandard credit quality and whose full repayment of principal and accrued interest is questionable.

Investopedia Says

Investopedia explains 'Adversely Classified Asset'

According to the Risk Management Manual of Examination Policies used by the FDIC, adversely classified loans fall into three categories: substandard, which are unduly risky and, if unimproved, may be a future hazard; doubtful, whose collection is highly questionable and improbable; and loss, which are considered noncollectable.

Besides stating the amounts of adversely classified assets in each category, bank examiners also typically compute the ratio of adversely classified assets to total assets and the ratio of adversely classified loans to total loans.

Articles Of Interest

  1.

    Analyzing A Bank's Financial Statements

    A careful review of a bank's financial statements can help you identify key factors in a potential investment.

  2. Is Loan Protection Insurance Right For You?

    This coverage can keep you from defaulting on your loans when you're in financial trouble.

  3. Impairment Charges: The Good, The Bad And The Ugly

    Impairment charge is a term for writing off worthless goodwill, but you need to know what its potential impact is on EPS.

  4. What happens if a company doesn't think it will collect on some of its receivables?

    The accounts receivable account, or receivables for short, is created when a company extends credit to a customer based on a sale. However, there are times when a company will not collect on ...

  5. Financial Career Options For Professionals

    Find out if spreading your wings to try a new career will make you soar or fall flat.

  6. Banks Will Be Under More Stress In 2012

    The FDIC has proposed new regulations for banks.

  7. The Banking Industry In 2012

    Major banks in 2012 can expect to lose customers as they struggle with the Dodd-Frank Act and new fees.

  8. Why You Should Stick With The Big Banks

    Big doesn't always mean bad. We tell you four reasons why.

  9. The Banking System

    Banks have been with us as long as money. Here is a detailed breakdown of how banks and the banking system work.

  10. 5 Ways Banks Will Pad Their Profits This Year

    Recent regulations have banks looking for new ways to make money. Find out how your banking will be affected in 2011.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  2. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  3. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  4. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  5. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  6. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
Trading Center