When Will New Financial Institution Ratings Become Available?

Kaight
  |     |   393 posts since 2011

My best understanding is that such ratings are updated quarterly. We concluded the first quarter about three weeks ago. How much longer must we wait for the new ratings?

Obviously enhanced ratings focus is precipitated by impact of the coronavirus. I'm concerned even the first quarter numbers, and ratings, will reflect only a couple of weeks (final two weeks of March) of virus impact. It'll be the second quarter outcomes, I'm afraid, that reveal reality. And we will have to wait many more months to see those ratings.



Answers
Ken Tumin
  |     |   6,076 posts since 2009
We now have health ratings for all banks and credit unions based on the latest FDIC/NCUA call reports (which is from December 31, 2019). The FDIC/NCUA call reports for Q1 (March 31, 2020) will not be available until late May.

You can review our health ratings and Texas ratios of all the banks and credit unions at the following page:
https://www.depositaccounts.com/banks/health.aspx

I'll have more on this soon.
Choice
  |     |   109 posts since 2020
The more timely info is retained in the C-suite, the next best is what publicly traded companies put out. The SEC is the best tool on timeliness
alan1
  |     |   417 posts since 2015
This website posted its updated health ratings for the third quarter of 2019 on December 20, 2019.
https://www.depositaccounts.com/blog/fdic-quarterly-report-updated-health-grades/

Based on that example, it would seem to take close to three months from the end of a calendar quarter for this site to update its ratings.

However, as to the fourth quarter of 2019, the following appeared on March 20, 2020:
"The DA financial health grades are based on the FDIC and NCUA quarterly call reports. The FDIC and NCUA publish the call reports about two months after a quarter ends. Both have recently published the call reports for the fourth quarter of 2019. We have imported the data, but a technical issue is preventing updates for credit unions. However, the import was successful for banks. Thus, we now have the financial data and financial health grades for all banks based on call reports from December 31, 2019. Credit union data and health grades are currently based on September 30, 2019 call reports."
https://www.depositaccounts.com/blog/2020/03/safety-deposits-covid19-pandemic.html

I don't know when the technical issue involving credit unions was resolved. It seems to be resolved for those credit unions where I have accounts.
alan1
  |     |   417 posts since 2015
In addition to the March 2020 call reports being available from the NCUA through "Research a Credit Union" at https://mapping.ncua.gov/ResearchCreditUnion.aspx, I believe that the most recent NCUA "Financial Performance Report" may now be ordered via https://fpr.ncua.gov/FPRRequestSingle.aspx?cu_number

The numbers are available. What's missing seem to be grades assigned by some of the rating services.

Note: "BauerFinancial.com is currently updating its website with New Bank Star Ratings and Data!"
https://www.bauerfinancial.com/star-ratings/
Kaight
  |     |   393 posts since 2011
Hmmm. So Bauer is updating, eh? Well, Ken did tell us "late May". It'll still be May for a few more hours. I can feel it in my bones. Those new ratings are right around the corner! Whenever they show up, it will not be a moment too soon.

You know, I hate this awful pandemic and what it has done to harm us all.  Absent the pandemic I would not have a care in the world about these new ratings.  At the start of 2020 everything was GREAT!  That was then.  This is now.   Things have changed.  And now I really need to see the latest ratings.
alan1
  |     |   417 posts since 2015
Bauer bank ratings have been updated to reflect March 31 data. Credit union ratings have not been updated.

from Bauer:

Bank star ratings are based on 03/31/2020 financial data; credit union star ratings are based on 12/31/2019 financial data.

Due to the disruption that COVID-19 has caused, regulators allowed an extra month for banks to file their Call Reports this quarter; approximately 500 banks have taken advantage of the extension. As a result, you may not be able to find an existing bank on our website. This is temporary. We will get the late-filers evaluated and on our website as quickly as possible – we anticipate before the end of June.

https://www.bauerfinancial.com/star-ratings/
Kaight
  |     |   393 posts since 2011
Thank you so much for posting that. It's a real help!

At the same time possibly having to wait another month for absolutely CRITICAL information is crushing. This assuming credit unions, like banks, were offered the same extra month to file. I do not care about banks.

Dear Lord how I hate COVID-19 and this awful pandemic!
alan1
  |     |   417 posts since 2015
from NCUA's "Temporary Regulatory Relief in Response to the COVID-19 Pandemic", section titled "Late Call Report Civil Money Penalties":

The NCUA will not take action against any credit union for submitting the March 31, 2020, Call Report after the respective filing deadline as long as the report is submitted within 30 days of the official file date of Sunday, April 26, 2020.

https://www.ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/temporary-regulator...
Kaight
  |     |   393 posts since 2011
Oh, swell. The coup de grâce. This gives new meaning to the phrase "flying blind".

You have spoiled my day. But thank you so much for posting!  What you have posted is devastating . . . but also very very helpful to know.
alan1
  |     |   417 posts since 2015
I don't quite understand your level of concern. That's not to say that your concern is unwarranted. The ratings may be of use to you, but there's plenty of recent information available. And it's the same information used by the rating services.

For example, I believe you've mentioned GTE and Navy Federal. The financial data ("the numbers") are readily available. And you can compare the March 31, 2020 numbers to the numbers from the previous quarter or the numbers from one year ago.

All that's lacking are the grades assigned by some rating services. But comparing the recent numbers to earlier numbers should give you a handle on significant changes, if any, in an institution's financial picture as of March 31, 2020.
Kaight
  |     |   393 posts since 2011
Thank you, alan1, for your most kind post. I appreciate it a lot. The honest truth is I do not really trust myself, my financial acumen, to make the sorts of judgements required in these matters. Perhaps I'm selling myself short and should try to do as you suggest. But I'm candidly MUCH more comfortable leaving such matters as this to the experts here on Ken's site and at Weiss Research, or even at Bauer. I have no experience whatsoever evaluating financial institution data.

Ken has not addressed any of this yet. Perhaps he will. I would trust his thinking on these things far more readily than I would trust my own. It's a difficult situation.
lou
  |     |   783 posts since 2010
If NFCU goes under, then you kiss all the credit unions goodbye. Don't mean to be contrarian, but this thread is a little crazy.
Kaight
  |     |   393 posts since 2011
I appreciate all the responses. Thank you.

It'll be tough to wait until approximately late September for ratings which fully reflect pandemic impact. Since most of the first quarter was quite good, I doubt much will be learned from the data set released at end of March. And of course data from way back in 2019 will look great, generally speaking I mean, compared with now.  Day and night.

It's a tough situation for those trying to gauge pandemic impact on our American individual financial institutions. Just hope not too many go belly up between now and the day we finally are able to learn how they're actually doing.

I'm not smart as I wish I were about this.  Presumably there are important aspects of an individual institution's circumstances which would convey some notion of that institution's ability to withstand the pandemic's economic impact.  Is that the amount of money each institution has in reserve?  I dunno.  Also have to assume each financial institution's investment mix will weigh heavily on its ability to endure the current economic stress.  But I don't have a feel for which investments might be preferable, and which others might signal jeopardy.

The people who publish the ratings have a good handle on all that stuff, obviously.  They understand.  But by the time we learn their opinion it might be too late.
RJM_Willy12
  |     |   149 posts since 2016
Can any of the people asking for the ratings explain why they think they are useful?

What percentage of A rated companies default in the next 1, 3, 5 years? Do A rated companies actually have lower default rates than B companies?

If the default rate for C rated companies is 1% over 5 years, is that reason to avoid all C rated banks?

Without knowing that, why do you think the ratings are important?
Kaight
  |     |   393 posts since 2011
Already answered but happy to post this again:

I have a bunch of add-on CDs and money to apportion among them. It is a bad idea to place money into an add-on CD at a financial institution which could turn turtle. This because of the risk you either might get the money back if the financial institution is closed outright, or have the terms of your CD unfavorably altered if a new financial institution takes over. Getting money back today, which then must in turn be reinvested into a CD at today's low rates, is a fate to be avoided if at all possible.

My game plan is to place as much money as possible into financial institutions with the best chance to remain viable and come out the other side of the pandemic intact. The ratings, when they become available, will be important to my decision as to where to put money going forward.
Kaight
  |     |   393 posts since 2011
I'm posting here principally in order to remind readers to commence being on watch. Please refer to Ken's post, above, which is the Top Answer here. Ken instructed us one month ago that updated ratings will be available in "late May".

As a reminder, even these immanent updated ratings will include only roughly two weeks of pandemic impact. That is probably insufficient. But it has to be better than the useless December 31, 2019 data upon which existing ratings are based! The ratings we really need to see will not be available until the end of August. Those ratings will reflect a full three months (April, May, June) of pandemic impact on our financial institutions.

Why suddenly this focus on ratings? Are not almost all financial institutions insured either by the NCUA or the FDIC? Yes, of course. But if you're choosing an add-on CD into which to deposit money, you do not want it to be at a financial institution which could turn turtle. The latter might result in return of your money or a change in the terms of your CD. Better to select the most solid financial institution you can to house your add-on CD funds.  Any return of your money today, with interest rates so low, is a death sentence for the earnings prospects of those returned dollars.
Kaight
  |     |   393 posts since 2011
Well, tomorrow is the final business day in May. Still nothing, still watching each day for updated bank and CU health ratings. It continues to say "Data as of Q4 2019" both here AND elsewhere. Since the problem is across the board I'm wondering if the pandemic has somehow caused late release of such critical and pivotal data. Guess such a thing is possible.

One thing remains certain: in the wake of the pandemic, health ratings based on pre-crisis 2019 data are almost surely overly optimistic. Am anxiously awaiting the new ratings.
alan1
  |     |   417 posts since 2015
March 2020 financial data for NCUA-insured credit unions should be available through "Research a Credit Union" at the NCUA website.

https://mapping.ncua.gov/ResearchCreditUnion.aspx

March 2020 financial data for FDIC-insured banks should be available through the Federal Financial Institutions Examination Council's (FFIEC) Central Data Repository's Public Data Distribution website.

https://cdr.ffiec.gov/public/

Please note my use of the word "should". Information was available for institutions that I checked, but it's possible that there have been delays in filing reports and/or placing them on the websites.

However, when you wrote that "the problem is across the board", I suspect your board did not include governmental entities. My guess is that the problem does not lie in "late release" of data. I suspect the data was released in a timely manner and that various non-governmental entities are responsible for any delays in posting data on their websites.
Kaight
  |     |   393 posts since 2011
Frankly I only use Ken's ratings along with those of Weiss Research. I didn't want Ken to think I was picking on him. Weiss also, yesterday, was continuing to display the 2019 data alongside ratings based on that very old data.

Again it was Ken himself, in his post above, who pointed to "late May". That was not my call. Regardless, we have now reached the last business day of May.  It "don't git no later" in May than this.

Finally, I think the ratings about to emerge might be influential . . . but they are unlikely to be determinative as regards the way I employ my add-on CDs going forward. Regrettably, sadly, the determinative end of June ratings will not be available for another three months.  
Bob14
  |     |   1 posts since 2020
Navy Federal is the largest credit union in terms of deposits and ranked in the top 200 in terms of financial solvency. Curious whether folks would, in light of the institution's multiple IRA add-on features, intentionally exceed the $250,000 insurance cap on IRA deposits for a period of time? One add-on offer terminates in 2022; another in 2023. Thank you.
Ally6770
  |     |   2,884 posts since 2010
At one time Navy only allowed one IRA with the add on feature. Your choice Traditional or Roth. As of being over the limits I was for a couple of years until I purchased a Roth for 4.25 about 2-3   years ago. Also I believe at one time there was a limit of $150,000 for the add on CD. Give them a call as these restrictions may have changed. During these times I would not go over the limit on any IRA or CD anyplace. You have CD's I would assume because you want no losses. Why take a chance. 
There is a reason this administration has decided against releasing the mid-year financial forecast.  
QED
  |     |   97 posts since 2013
I have several financial institutions on my personal "watch list", anxiously awaiting the new health ratings being discussed here. NFCU is among those on my list.

Can warn you that NFCU, at end of 2019, had a liquidity deficit. Today? Who knows. That's why we need the new numbers. 2019 is so far back in the rear view mirror those old numbers scarcely matter.

GTE Financial is also on my list.  The liquidity at GTE is (or at least it was) actually better than at NFCU.  That is not what you would expect.  I hope the end of March liquidity number for NFCU shows improvement.  But right now we just do not know.
Kaight
  |     |   393 posts since 2011
Are you seriously comparing NFCU with GTE Financial?! That is like comparing a Rolls Royce with a Yugo. :-)

But, OK, I looked at the Weiss Research website and you actually are correct. Amazing stuff. But, yes, the liquidity standing of NFCU is poorer . . . but only slightly. And in all the other ratings categories NFCU absolutely destroys GTE. And NFCU is a full two ratings above GTE, too.

All that said, we do agree the NFCU liquidity aspect is somewhat concerning. As you mentioned, NFCU liquidity will bear watching when we get the new numbers. I, too, hope there is improvement.
Kaight
  |     |   393 posts since 2011
Noted in passing . . . with regret:

The OP here is dated 22 April. Today is the final day of June. And we still have no new ratings for credit unions based on financial data which is, as of today. THREE months old!!

It is different for banks. At least Weiss ratings is using March 31 data for their bank ratings. Credit to Weiss for that.

But personally bank ratings do not help me. Nearly all my financial resources are placed with various credit unions. And both Weiss and Bauer ratings, for credit unions, are based on financial data which is, as of today, SIX months old and completely pre-pandemic.

I surely hope some updated credit union ratings emerge this week.
jbeckner
  |     |   6 posts since 2015
The NCUA hasn't released the Q1 report yet. If you want to keep an eye on it, you can check here (https://www.ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports).
alan1
  |     |   417 posts since 2015
As stated upthread (May 31, 2020):

In addition to the March 2020 call reports being available from the NCUA through "Research a Credit Union" at https://mapping.ncua.gov/ResearchCreditUnion.aspx, I believe that the most recent NCUA "Financial Performance Report" may now be ordered via https://fpr.ncua.gov/FPRRequestSingle.aspx?cu_number
Kaight
  |     |   393 posts since 2011
Thank you for posting, jbeckner. That is a good and helpful link. For those who prefer just to click, here it is in clickable form:

https://www.ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports
alan1
  |     |   417 posts since 2015
The NCUA has released the Quarterly Credit Union Data Summary for the first quarter of 2020.
https://www.ncua.gov/files/publications/analysis/quarterly-data-summary-2020-Q1.pdf

Related press release at https://www.ncua.gov/newsroom/press-release/2020/ncua-releases-q1-2020-credit-union-system-performan...


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