HAR §16-27-10. Unsafe or unsound condition

(a) An unsafe or unsound condition of an institution depends upon an analysis of virtually every aspect of the institution's operation. The institution's capital position, asset condition, management, earnings posture, liquidity position, and sensitivity to market risk shall be carefully evaluated. An institution's condition need not deteriorate to a point where it is on the brink of insolvency before its condition may be found to be unsafe or unsound. (b) Although not an all-inclusive list, the following are examples of unsafe or unsound conditions: (1) Maintenance of unduly low net interest margins; (2) Excessive overhead expenses; (3) Excessive volume of loans subject to adverse classification; (4) Excessive net loan losses; (5) Excessive volume of overdue loans; (6) Excessive volume of nonearning assets; or (7) Excessive large liability dependence. [Eff 8/13/87; am and comp 1/27/01] (Auth: HRS §§412:2-100, 412:2-107, 412:2-300, 412:2-301, 412:12-109, 412:13-224) (Imp: HRS §§412:2-100, 412:2-300, 412:2-301, 412:2-302, 412:2-306, 412:2-308, 412:2-311, 412:2-314, 412:2-315, 412:2-400, 412:12-109, 412:13-224, 412:13-228, 412:13-229, 412:13-230) 27-5 §16-27-16 SUBCHAPTER 3 INFORMAL SUPERVISORY AND ENFORCEMENT ACTION