Financial Terms

. Assets

 Assets are any item of economic value owned or controlled by an individual or company. Assets can be physical resources, like buildings, computer, or nonphysical, like patents or trade marks. Other assets are outstanding loans, fee and interest income, investments, processing and services income, even employees.

. Assets Under Management AUM

 AUM describes the assets that the company managers for customers. Decisions are made on behalf of customers to buy, sell, hold, etc.

. Capital

 Capital represents the money held or other property owned that could be used in transacting business.

. Credit Costs

Credit Costs are the amount of money that is set aside in reserve for the write-off of bad loans and unpaid customer balances.

. Dividends

 Dividends are a portion of the company's net income and earnings that are paid out to shareholders. They are a certain amount per share and are approved for distribution each quarter by the board of directors.

. Expense

 Expense is the overall cost of running the company, including salaries, benefits, equipment, real estate, operating costs and taxes.

. Earnings Per Share

 Earnings Per Share are the portion of a company's profit allocate to each outstanding share of common stock. It is derived by dividing net income by the number of outstanding shares of stock.

. Efficiency Ratio

Efficiency Ratio describes how well expense are being managed. For example, an efficiency ratio of 60% means expenses represent $0.60 of every dollar in revenues we earn.

. Fortress Balance Sheet

 To have a Fortress Balance Sheet requires a thorough understanding and management of our assets and liabilities; the use of conservative, appropriate accounting; tight financial controls; strong loan loss reserve; and a commitment to solid credit ratings.

. Liabilities

 Liabilities are obligations of an individual or corporation, such as a debt owed ( like the repayment of a loan ) or something that must be returned (such as our customer deposits, operating expenses, interest we pay to our customers).

. Market Capitalization

Market Capitalization is a measurement of a company's size calculated by multiplying a company's stock price by the number of shares outstanding.

. Net Income

Net Income is the difference between the corporations total revenues( the fees it brings in ) and it's total expense ( salaries, benefits, operating costs and taxes )

. Net Interest Income

Net Interest Income is the gross interest income minus gross expense

. Net Worth

Net Worth is the amount by which a company's or individual's assets exceed their liabilities

. Operating Earnings

 Operating Earnings are the profits after subtracting expense ( such as marketing, cost of goods sold, administration and general operating costs ) from revenues. It is the amount available to spend.

. Organic Growth

 Organic Growth is growth that is generated within the company's existing framework and is derived from the development of new products, opening new locations, and expanding customer bases and relations ( vs. making new acquisitions or purchasing other companies ).

. Proforma

 Proforma is the description of financial statements that include hypothetical conditions.

. Revenue

Revenue is income that flows to a company before deductions are made for any costs or expenses. Includes sales, rents, interest, fees, etc.

. Return on Assets

Return on Assets is a measurement that indicates how efficient a company's assets are being employed. Determined by dividing net profits by average total assets.

. Return on Equity (ROE)

Return on Equity is a measurement that indicates how efficiently a company's equity capital has been put to profitable use. Determined by dividing net income by shareholder's equity.

. Shareholders Equity

Shareholders Equity is a company's total assets minus its total liabilities. Equivalently. it is share capital plus retained earnings minus treasury shares. It is the amount of the company that is financed through common and preferred shares of stock.

. Tier I Capital 

Tier I Capital describes the capital adequacy of a bank ( the safeness and soundness of the bank ). Tier I Capital is core capital and includes equity capital and disclosed reserves.