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Quarterly Ratings Have Begun To Come In

Kaight
  |     |   1,192 posts since 2011

Both Ken and Bauer have now published their bank health reports based on Q1 2023 data. The world awaits their health reports for credit unions. These reports always appear just a bit later than the bank reports.

Weiss?

I didn't even bother to check. Will somebody please wake Marty up!

Seriously, the Weiss ratings will (I hope) be along prior to Independence Day. They always appear much later than the ratings from Ken and Bauer.

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Kaight
  |     |   1,192 posts since 2011
Well, doggone!

I was unfair in the OP when I wrote poorly of Marty. My bad:

Weiss ratings has updated their bank ratings to reflect Q1 2023 data.  I should have looked.  And possibly of interest:

Marty has upgraded Ally Bank from C+ to B.
Marty has downgraded Northern Bank & Trust from A- all the way down to C-.  Geez.

A two level rate decline in just three months is uncommon.  Marty must smell a rat.  My own purely uninformed guess:  high levels of commercial real estate and commercial loans.

Credit unions?

Those ratings always take longer to emerge. So far not one of the big three services is providing updated credit union health ratings.
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Kaight
  |     |   1,192 posts since 2011
All three services, Ken, Bauer, and Weiss, have now posted health ratings for credit unions based on Q1 2023 data. And there is something of interest at Weiss Ratings:

For the first time in a long while, the Weiss health rating for Navy Federal Credit Union has fallen below A or A-.

Marty is now rating NFCU at B+.

Obviously this decline is not cause for panic or alarm. NFCU is (I assume) too big to fail. But the situation does bear watching.

Also possibly noteworthy:

Marty has dropped Penfed from a very consistent B+, down to a C.  Penfed's liquidity is pathetic!
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sams1985
  |     |   781 posts since 2022
I have a brokered CD with University Bank in Michigan. Just out of curiosity i looked them up.

Ken gives them an "A" rating. Bauer has them at 4 stars ( excellent-recommended) Yet on Weiss ratings, they have a D+.

Can someone explain-if they are using the same data, how could the ratings be so vastly different?
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txFish1
  |     |   479 posts since 2023
not 100% sure but i believe Weiss puts some emphasis on liquidity to determine the ratings and University Bank in Michigan has none or very little. I checked about 10 Credit Unions on Weiss and his ratings on all of them are lower than DA and Bauer by one or two letter grades consistently
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Kaight
  |     |   1,192 posts since 2011
Marty (Dr. Martin Weiss, founder of Weiss Ratings) is oftentimes a tough grader . . . but not every time:

https://weissratings.com/en/experts/martin-weiss

He is also a somewhat controversial figure. This is why, if you care about the health of your financial institution, you need to check and evaluate all three ratings before you make up your mind about where you stand.

One thing I like about Marty's work:  he offers a short ratings history for each financial institution.  That way you can get a feel for movement (if any) in the health standing of the institution in question.  Is health deteriorating, is health improving, what direction are things taking.  This knowledge is more valuable to me that just a static rating.
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CDmanFL
  |     |   286 posts since 2019
Looks like GTE got a little weaker. Anyone concerned?
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Kaight
  |     |   1,192 posts since 2011
GTE is in a good, high growth, region and is likely to be OK in my view. But I would never exceed the NCUA allowed max at GTE.

"Likely" . . . . . . . is not a strategy.
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CDmanFL
  |     |   286 posts since 2019
I hear you Kaight. I’m over the NCUA limit at Navy (just because they are awesome in every regard and such a big pleasure to deal with) and I agree (actually hope) that they are too big to fail. Can’t even imagine that nor do I want to even try. But you raised my eyebrows a bit and got me wondering. Hopefully it’s just a one time blip.
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JeffinEasternFL
  |     |   744 posts since 2020
And if ya got less than $250K in any, the rating really doesn't matter....so diversify!
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Kaight
  |     |   1,192 posts since 2011
The health rating still matters. Here is why:

It's not a concern about loss of funds. If you're within the insured max, NCUA or FDIC insurance will be there for you and will make your deposits good. That conceded, where's the problem?

When a bank or CU goes down with your dough inside, the outcome is indeterminate. Oftentimes another financial institution will take over and honor your original CD terms. Other times, as actually happened to me, no other financial institution chooses to become involved. At that point the insurer returns your (insured) money to you quickly. But, since you don't control the timing of such an event and interest rates might have declined, you could be left with only poorer options when you have need to re-invest those funds.

When significant sums of money are involved, it's well to know the health standing of the financial institution where you have placed, or have plans to place, those funds. I suspect that is why Ken, and the others, make this information available to us savers every quarter.
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