This checklist is for lenders and credit teams evaluating whether a proposed bank partner can actually support a credit facility. The decision is not just “Do we like the term sheet?” It is “Can this bank fund, govern, and defend the relationship through stress?” Fintech founders, journalists, and bank directors may still use the same public-data screen, but the primary lens here is lender approval.
Published: April 23, 2026. Updated: April 24, 2026. Regulatory references and public-source links were reviewed on April 24, 2026.
Executive checklist: decide whether the bank deserves diligence time
- Confirm the bank: identify the exact legal institution, regulator, holding company, and current status before analyzing a term sheet.
- Pull public sources first: start with FDIC BankFind Suite [1], the Federal Reserve National Information Center [2], the FFIEC Central Data Repository [3], and current FFIEC Call Report instructions [4].
- Test capital headroom: compare regulatory capital ratios with the well-capitalized prompt corrective action thresholds [5], then flag any ratio with less than 100 basis points of cushion.
- Test earnings quality: negative earnings, falling retained earnings, or provision expense rising faster than loan growth should trigger a capital-plan question.
- Test funding capacity: a loan-to-deposit ratio above 90 percent is a yellow flag; above 100 percent needs a written funding plan.
- Test asset quality and concentration: rising noncurrent loans, net charge-offs, or commercial real estate concentration near supervisory screens should move the bank into deeper review.
- Walk away or pause: do not treat the term sheet as bank capacity if capital is close to threshold, earnings are negative, liquidity depends on unstable funding, or an active order limits the proposed activity.
Start with the exact legal bank, not the marketing name. Confirm the institution in FDIC BankFind Suite [1] or the Federal Reserve’s National Information Center [2], then pull the most recent Call Report from the FFIEC Central Data Repository [3]. The form matters: many smaller domestic banks file FFIEC 051, larger domestic banks often file FFIEC 041, and banks with foreign offices or larger scope may file FFIEC 031. The FFIEC 051 Current Information page [4] is where the FFIEC posts current forms, instructions, and supplemental instructions for that report.
Start with capital and profitability
What to check: A proposed facility can look cheap and still be fragile if the bank has little capital headroom. First read Schedule RC-R, the Call Report capital schedule; Schedule RC, the balance sheet; Schedule RI, the income statement; and Schedule RC-K, quarterly average balances. Do not rely only on a bank deck or a press release. The Call Report schedules are the common source that lets you compare one bank against another.
Why it matters: Use the prompt corrective action capital thresholds as the first gate. For an FDIC-supervised institution, the well-capitalized screen generally requires at least 10.0 percent total risk-based capital, 8.0 percent tier 1 risk-based capital, 6.5 percent common equity tier 1 capital, and a 5.0 percent leverage ratio, plus no order or directive requiring a specific capital level [5]. For a lender choosing a bank partner, clearing those numbers is a floor, not a full approval.
Red flag: Then check whether earnings are adding to that capital base or consuming it. Schedule RI gives net income and provision expense. Schedule RI-A shows changes in bank equity capital. If earnings have been negative for two or more recent quarters, if retained earnings are falling, or if provision expense is rising faster than loan growth, ask whether the facility could be reduced, repriced, or put on hold during the next board-level capital discussion.
- Capital: compare each Schedule RC-R ratio with the well-capitalized thresholds, then require written explanation for any ratio with less than 100 basis points of headroom.
- Profitability: use Schedule RI net income and Schedule RC-K average assets to compute annualized return on average assets; a falling trend matters more than one quarter alone.
- Capital retention: read Schedule RI-A for dividends and other capital movements; distributions during weak earnings deserve a specific question in management diligence.
- Growth pressure: compare loan growth from Schedule RC-C with deposit growth from Schedule RC-E; rapid asset growth funded by noncore sources can change the bank’s appetite after closing.
Original analysis example: If a bank reports an 8.6 percent tier 1 risk-based capital ratio, its headroom above the 8.0 percent well-capitalized threshold is 60 basis points. That is not an automatic decline, but it is too thin for a committed facility without a capital-maintenance covenant, quarterly capital reporting, and a draw stop if the ratio falls below an agreed buffer. If the same bank also has two quarters of losses, the question becomes capacity, not pricing.
Review funding and liquidity
What to check: A bank partner’s ability to fund commitments depends on deposits, borrowings, securities liquidity, and management’s willingness to use those sources. Read Schedule RC-E for deposit detail, Schedule RC-O for selected deposit and insurance-assessment data, Schedule RC-B for securities, and Schedule RC for borrowings. If the facility is a warehouse line, forward-flow program, or sponsor-bank arrangement with daily settlement flows, funding is not a background issue.
Why it matters: Uninsured deposits require extra care. FDIC deposit-reporting materials explain that banks report certain deposit liabilities in the Call Report, but public reporting does not give a complete view of insured and uninsured deposit composition [6]. That means Schedule RC-O can help you spot exposure, but it should not be the only evidence for depositor stability. Ask for management’s internal breakdown by customer type, average balance, industry, top depositor concentration, and operational purpose.
Red flag: For a first-pass screen, use these working rules. A loan-to-deposit ratio above 90 percent is a yellow flag for a committed facility. A ratio above 100 percent needs a written funding plan that names backup sources. These are not regulatory limits; they are lender diligence thresholds computed from public Call Report data in Schedule RC-C and Schedule RC-E.
| Funding question | Public source | Decision rule |
|---|---|---|
| Are loans growing faster than deposits? | Schedule RC-C loans and Schedule RC-E deposits | If loan growth beats deposit growth for two consecutive quarters, ask how the facility will be funded without added wholesale dependence. |
| Is the bank relying on brokered or rate-sensitive deposits? | Schedule RC-E memoranda and FDIC brokered-deposit materials | If brokered deposits are a material funding source, ask whether the bank would remain able to accept or renew them if capital category or supervisory status changed. |
| Are uninsured deposits concentrated? | Schedule RC-O plus management’s internal deposit reports | If public data shows material uninsured deposits, require the bank’s top-depositor and industry-concentration view before signing. |
| Are securities a liquidity source or a pressure point? | Schedule RC-B securities and Schedule RC balance sheet equity | If unrealized pressure would matter to tangible capital or liquidity planning, ask how the bank would fund draws without selling securities at a loss. |
What to ask management: Ask for the latest liquidity report, top-depositor list, borrowing-capacity schedule, contingency funding plan, and any board limit that could constrain facility draws. If the public numbers show pressure, make the answer operational: who approves funding, from what source, under what stress scenario, and with what reporting to the lender?
Check asset quality and concentration
What to check: Asset quality tells you whether management will still want your facility when its own borrowers start to weaken. Use Schedule RC-N for past-due and nonaccrual loans, Schedule RI-B for charge-offs and recoveries, Schedule RI-C for allowances for credit losses, and Schedule RC-C for loan categories. CECL, or current expected credit losses, matters here because it estimates expected credit losses rather than waiting for incurred losses [7].
Why it matters: Commercial real estate concentration is one of the fastest ways a bank’s risk profile can diverge from a clean capital ratio. The interagency CRE concentration guidance uses two supervisory screening criteria: construction, land development, and other land loans at 100 percent or more of total risk-based capital; or total CRE loans at 300 percent or more of total risk-based capital with CRE growth of 50 percent or more during the prior 36 months [8]. Those are not legal lending limits, but crossing either threshold should move the bank into deeper review.
Secondary sponsor-bank and fintech angle: For sponsor-bank or embedded-finance relationships, add a control review to the credit review. Interagency third-party risk guidance covers planning, due diligence, contract negotiation, ongoing monitoring, and termination [9]. Recent FDIC materials on bank arrangements with third parties and AML/CFT, meaning anti-money laundering and countering the financing of terrorism, are especially relevant when the relationship adds deposit, payments, or compliance-program questions [10] [11].
Red flag: Do not treat enforcement screening as optional. Search FDIC Enforcement Decisions and Orders [12], OCC enforcement actions [13], and Federal Reserve enforcement actions [14] for the bank, holding company, and predecessor names. A consent order does not automatically mean “no,” but it changes the diligence burden. The Federal Reserve Board’s June 14, 2024 enforcement action against Evolve Bancorp, Inc. and Evolve Bank & Trust is a useful example because the release names anti-money laundering, risk management, and consumer compliance program deficiencies and says the action was independent of Synapse Financial Technologies, Inc. bankruptcy proceedings [15].
What to ask management: Ask whether any criticized asset trend, CRE concentration, third-party-risk finding, or enforcement matter affects approval authority for the proposed facility. Then translate the answer into documents: reporting, eligibility limits, borrowing-base haircuts, termination rights, launch conditions, or regulator non-objection where needed.
Run a 30-minute public-data workflow before management diligence
Use public data to decide which questions deserve management time. Start in bank search and individual bank profiles to identify the bank, then use the linked public-data context and peer views where they support the memo. The goal is not to replace legal, credit, or regulatory review. The goal is to avoid walking into a diligence call with only the term sheet.
- Step 1: confirm the legal bank, regulator, holding company, and current status in FDIC BankFind Suite [1] or NIC [2].
- Step 2: pull the last four Call Reports from the FFIEC Central Data Repository [3] and save the Schedule RC, RC-R, RC-C, RC-N, RC-E, RC-O, RI, RI-B, RI-C, and RC-K pages used in your analysis.
- Step 3: calculate capital headroom against the well-capitalized thresholds [5], loan-to-deposit ratio from Schedule RC-C and RC-E, noncurrent loan trend from Schedule RC-N, and net charge-off trend from Schedule RI-B.
- Step 4: test CRE concentration against the 100 percent and 300 percent interagency CRE guidance screens, including the 50 percent growth lookback for total CRE [8].
- Step 5: search FDIC, OCC, and Federal Reserve enforcement sources before you ask for a call with management [12] [13] [14].
- Step 6: convert each yellow or red flag into a covenant, condition precedent, reporting package, borrowing-base limit, termination right, or board-level question.
| Screen result | What it means for the facility | Practical next step |
|---|---|---|
| All capital ratios clear the well-capitalized thresholds with more than 100 basis points of headroom, earnings are positive, and no public order appears. | The bank clears the first screen. | Proceed to management diligence, legal review, and facility-specific underwriting. |
| Capital clears the threshold, but loan growth exceeds deposit growth, uninsured deposits are material, or CRE concentration approaches the interagency screen. | The bank may still be acceptable, but the facility needs tighter reporting and funding covenants. | Ask for liquidity reports, deposit concentration data, CRE stress detail, and approval authority before signing. |
| Capital is close to the threshold, earnings are negative, noncurrent loans are rising, or an active enforcement order limits relevant activities. | The term sheet should not be treated as bank capacity. | Pause approval until management explains remediation, capital planning, and any regulator non-objection needed for the relationship. |
The final credit memo should end with a yes/no rule. Approve the bank partner only if the public schedules show capital headroom, funding capacity, and asset-quality stability; the enforcement search does not reveal an unresolved issue tied to the proposed activity; and the facility documents give you current reporting, draw-control, and exit rights if those facts change.
FAQ
What is the fastest lender screen for a bank partner? Confirm the legal bank, pull the last four Call Reports, test capital headroom, funding capacity, noncurrent loans, charge-offs, CRE concentration, and enforcement history, then decide whether the bank deserves management diligence.
Is a well-capitalized bank automatically a good facility partner? No. The capital ratios are a starting gate. A bank can clear the thresholds and still have funding pressure, CRE concentration, rising nonaccrual loans, or an enforcement order that affects the proposed relationship.
Which Call Report schedules matter most for a lender? Start with RC for the balance sheet, RC-R for capital, RC-C for loan mix, RC-N for past-due and nonaccrual loans, RC-E and RC-O for deposits, RI for income, RI-B for charge-offs and recoveries, RI-C for allowances, and RC-K for averages used in performance ratios.
When should a lender pause approval? Pause when capital headroom is thin, earnings are negative, loan growth is outrunning deposits, uninsured or brokered funding looks material, asset quality is weakening, CRE concentration is near supervisory screens, or an order affects the proposed activity.
How should a fintech-related facility change the review? Add third-party-risk, AML/CFT, consumer-compliance, payments, and deposit-control questions. If the bank will rely on a fintech program for operational flows or customer activity, the credit memo should cover both bank capacity and program governance.
Should this checklist replace counsel or bank regulatory advice? No. It is a public-data screen. Use it to focus management diligence and facility terms, then involve credit, legal, compliance, and bank-regulatory advisers before signing.
Sources
- FDIC BankFind Suite, institution identification and bank profile lookup: https://banks.data.fdic.gov/bankfind-suite/
- Federal Reserve National Information Center, bank and holding-company lookup: https://nic.federalreserve.gov/
- FFIEC Central Data Repository, public Call Report retrieval: https://cdr.ffiec.gov/public/
- FFIEC 051 Current Information, current forms and instructions: https://www.ffiec.gov/resources/reporting-forms/ffiec051
- 12 CFR 324.403, FDIC prompt corrective action capital categories: https://www.ecfr.gov/current/title-12/part-324/section-324.403
- FDIC FIL-48-2024, request for information on deposits and deposit data: https://www.fdic.gov/news/financial-institution-letters/2024/request-information-deposits
- Federal Reserve FAQ on ASU 2016-13 and CECL: https://www.federalreserve.gov/supervisionreg/topics/faq-new-accounting-standards-on-financial-instruments-credit-losses.htm
- OCC Bulletin 2006-46, interagency commercial real estate concentration guidance: https://www.occ.gov/news-issuances/bulletins/2006/bulletin-2006-46.html
- FDIC FIL-29-2023, interagency third-party risk management guidance: https://www.fdic.gov/news/financial-institution-letters/2023/fil23029.html
- FDIC FIL-45-2024, statement on bank arrangements with third parties: https://www.fdic.gov/news/financial-institution-letters/2024/agencies-issue-statement-bank-arrangements-third-parties
- FDIC FIL-42-2024, AML/CFT program-related issuance: https://www.fdic.gov/news/financial-institution-letters/2024/issuance-anti-money-launderingcountering-financing
- FDIC Enforcement Decisions and Orders database: https://orders.fdic.gov/s/
- OCC enforcement actions page: https://www.occ.gov/topics/laws-and-regulations/enforcement-actions/index-enforcement-actions.html
- Federal Reserve enforcement actions page: https://www.federalreserve.gov/supervisionreg/enforcementactions.htm
- Federal Reserve June 14, 2024 enforcement action release for Evolve Bancorp, Inc. and Evolve Bank & Trust: https://www.federalreserve.gov/newsevents/pressreleases/enforcement20240614a.htm