A rating that supervisory authorities (for example, the FDIC and the Federal Reserve System) use to measure a bank's soundness and financial condition. This rating is determined by an analysis of the bank's:

Supervisory authorities determine this rating based on a review of the bank's financial statements and an on-site examination. The ratings range from 1 (best) to 5 (worst). A CAMELS rating is highly confidential and is known only by the bank's senior management and appropriate members of the supervisory authority's staff.

A bank's CAMELS rating can have wide-ranging implications for its operations, including whether it will be allowed to engage in certain business activities or be subject to increased supervisory oversight and regulatory scrutiny. For more information, see Practice Note, US Banking Law: Overview: Examination.