Capital measures in US are determined by the total risk-based capital ratio, tier 1 risk-based capital ratio as well as the leverage ratio.
A bank is considered to be well capitalized if the bank possesses a total risk-based capital ratio of 10% or more. Moreover, it needs to have a Tier 1 risk-based capital ratio of 6% and more and also a leverage ratio of 5% and above.
A bank is deemed to be adequately capitalized, if the bank has a total risk-based capital ratio of 8% or more and has a tier 1 risk-based capital ratio of 4% or more and also a leverage ratio of 4% or more.
A bank is considered as undercapitalized, if the bank has a total risk-based capital ratio less than 8% or has a tier 1 risk-based capital ratio that is less than 4% and has a leverage ratio less than 4%.
A bank is considered to be significantly undercapitalized, if, the bank has a total risk-based capital ratio less than 6% and a Tier 1 risk-based capital ratio that is less than 3% in addition with a leverage ratio that is less than 3%.
