Forty-three percent of U.S. banks file no risk-based capital ratios, and the one ratio they do file tells its own story

Open the June 30, 2026 Call Report for a typical community bank and look for the capital ratios most people know by name, the Tier 1 risk-based ratio and the total risk-based ratio. For 1,819 of the 4,272 banks in the record, the lines are blank. That is 43 percent of U.S. banks with no risk-based capital ratio on file.

The blank is not a missing filing. Since 2020, a bank under $10 billion in assets that meets a few conditions may elect the community bank leverage ratio framework. A bank that elects it reports one capital number, Tier 1 capital divided by average assets, and skips the risk-weighted calculation entirely. Hold that ratio above 9 percent and the bank is treated as well capitalized. The risk-based lines go blank because the rule says they may.

Why this was a blind spot

Most capital screens were built on the risk-based ratios, because those are the ones that appear in press coverage and in the failures people remember. A screen built that way does not flag the framework banks as strong or weak. It skips them. Forty-three percent of the industry carries no capital reading at all, and the absence looks like silence rather than a choice.

Tellsign's own record had the same gap until August. The Financial lens read the risk-based ratios and found nothing for 1,819 banks. It now reads the leverage ratio directly for every bank, and the leverage ratio is where the framework banks have been writing their capital position all along.

What the leverage ratio says

For the 1,805 framework banks with a June 30 value on file, the median Tier 1 leverage ratio is 11.74 percent. A tenth of them sit below 9.54 percent and a tenth above 17.29. The distribution runs like this: 11 banks below 8 percent, 25 between 8 and 9, 302 between 9 and 10, 632 between 10 and 12, 502 between 12 and 15, and 333 at 15 percent or higher.

The framework's own line is 9 percent. A bank that dips below it has a two-quarter grace period, as long as it stays above 8, before it must return to the full risk-based calculation. Thirty-six banks reported below 9 percent on June 30. Eleven of those reported below 8, which is outside the grace period as the rule writes it.

Between the March 31 and June 30 filings, 17 framework banks crossed from above 9 percent to below it. 121 saw their leverage ratio fall by half a percentage point or more in the quarter, and 53 by a full point or more. 201 rose by half a point or more. Two filings are two filings, not a trend; the point is that the movement is visible once the ratio is read.

The comparison group

The 2,437 banks that do file risk-based ratios, and also carry a leverage value for June 30, have a median leverage ratio of 10.39 percent. 472 of them report below 9 percent. The framework banks are better capitalized on this measure, and that is the framework working as designed: a bank needs to be above 9 percent to elect it in the first place. The population that can skip the risk-based calculation is, on the whole, the population with the most capital relative to its balance sheet.

The framework banks are small. 1,579 of the 1,805 hold under $1 billion in assets, 222 hold between $1 billion and $10 billion, and the median is $273 million. Together they hold about $1.05 trillion. These are the banks that rarely appear in coverage and whose capital position, until now, did not appear in most screens either.

What Tellsign does with it

Every bank in the record now carries a capital reading. The Financial lens fires a signal when the Tier 1 leverage ratio drops below 9 percent, the framework's line; below 5 percent, the well-capitalized floor under prompt corrective action; and below 4 percent, the adequately capitalized floor. The signal carries the filing it came from, the reported figure, and the date it was retrieved.

One honest note on the method. The Call Report has a box where a bank marks its election. Tellsign infers the election from the absence of risk-based ratios in the FDIC's published data rather than from that box, and absence is not always election: four of the 1,819 banks hold more than $10 billion in assets and cannot be framework banks. The count is reported as what it is, banks with no risk-based ratio on file, and the leverage figures are read the same way for all of them.

This is a snapshot of one filing date and one quarter's comparison. Tellsign will report how the distribution moves at the September 30 filing. Every figure above is reproducible from the underlying records, and every signal derived from them carries a public source you can open. How the Distress Index is computed, lens by lens, is published here.