[gfmucci]

I went into a Citizens First branch (Colony) this morning to get some information about opening an account. With banks in the news lately, I asked the information person at the front, the one who works with new customers to open accounts, "what is the rating of this bank?"

She said she didn't know, but she will check with someone who does. Well, with the banks in the news lately, I was surprised that the rating wasn't on the tip of her tongue and the first bit of information why I should open an account there.

She came back in two or three minutes with the answer: "That information is confidential." I was surprised and put off by that answer, and as I got up to leave I gave my opinion of that answer, "That is the exact problem we're experiencing now with the banking industry...the lack of transparancy."

Funny thing is, bank ratings are public information. For example, TheStreet.com rates Wachovia a C+ and Citizens First a B-, not much difference. This was as of June 20, 2008. The next review is before the end of September, which should be out any minute now. There are several other rating services, e.g. AM Best and others. Here is an FDIC site that lists the various bank rating services: http://www.fdic.gov/bank/individual/bank/index.html

What do you guys understand about the ratings of local banks and how "confidential" that information is supposed to be?

[SteveFromNY]

I really don't know much about the meanings of the bank ratings, or their relevance in today's incredibly volatile market. Two fairly large banks failed in two days! WaMu & Wachovia! Scary!!!
However, I would assume that most of the lending Citizen's has done has been to TV homeowners (safe assumption, ya think?) and they could be pretty immune to the whole risky loan issues.

[sbm]

I am a banker for over 34 years that just purchased in TV this summer. I assume the person at the bank you were referring to was talking about their regulatory CAMEL rating. This is an internal rating established by the bank's particular regulator (ie. FDIC, OCC, etc.) This is a rating that is not available to anyone other than the bank and its board of directors. There are are other rating agencies out there such as the one you mentioned plus others like Dunn & Bradstreet, etc. In most cases the majority of bank employees probably do not know what their rating is, other than senior management. Your local bank provides an annual Financal statement which is available to the general public that shows their financial strengths or weaknessess and that should help you. In most cases you should not have to worry about your local banks. They are generally solid and profitable and highly regulated and this is causing there to be more regulation on the horizon. It's the Wall Street banks that are in trouble, not generally the main street banks like us. There is a big difference between Wall Street Investment banks and main street banks. Most community banks have not participated in the lending practices that have led to the current financial crisis. Independent community banks provide their customers with FDIC insurance. No bank customer has ever lost a penny of deposits insured by the FDIC. I know it's very unnerving currently, but in most cases your local bank is not effected and people should avoid panic as that can cause unnecessary problems. At our bank and others I know, Senior management is very willing to talk to you and try to dispel any concerns. We get lots of calls every day, but can usually help with just giving them the right information.

[diskman]

Eventually FDIC will run out of cash then what???

[chuckinca]

Originally Posted by sbm

I am a banker for over 34 years that just purchased in TV this summer. I assume the person at the bank you were referring to was talking about their regulatory CAMEL rating. This is an internal rating established by the bank's particular regulator (ie. FDIC, OCC, etc.) This is a rating that is not available to anyone other than the bank and its board of directors. There are are other rating agencies out there such as the one you mentioned plus others like Dunn & Bradstreet, etc. In most cases the majority of bank employees probably do not know what their rating is, other than senior management. Your local bank provides an annual Financal statement which is available to the general public that shows their financial strengths or weaknessess and that should help you. In most cases you should not have to worry about your local banks. They are generally solid and profitable and highly regulated and this is causing there to be more regulation on the horizon. It's the Wall Street banks that are in trouble, not generally the main street banks like us. There is a big difference between Wall Street Investment banks and main street banks. Most community banks have not participated in the lending practices that have led to the current financial crisis. Independent community banks provide their customers with FDIC insurance. No bank customer has ever lost a penny of deposits insured by the FDIC. I know it's very unnerving currently, but in most cases your local bank is not effected and people should avoid panic as that can cause unnecessary problems. At our bank and others I know, Senior management is very willing to talk to you and try to dispel any concerns. We get lots of calls every day, but can usually help with just giving them the right information.

Need to know that the $1.98 left after today's market bust is safe in the bank.


.

[GMONEY]

1.98?? take it out by you a happy meal and have a smile... By the way i do believe that might be covered by FDIC. it is pretty large sum though..
i agree with sbm. Citizens is safe. besides they deal more in cash and not CD's. Most banks from what i understand deal with alot CD's so they can have more of a cash flow. Look at WaMu and Wacovia. That is what happens when you get to greedy. Before you know it Citigroup who bought Wacovia might be on the block. they have to sell off alot of debt.

[784caroline]

StevefromNY

A point of clarification....Wachovia was taken over or bought out by Citibank. It did not fail requiring FDIC intervention.

[Skip]

Originally Posted by sbm

...not generally the main street banks like us... At our bank and others I know...

Sounds like you are speaking for Citizens First Bank.

Remember, CFB is a family owned, not a public bank. Fact is, CFB has a high "Non-Performing Asset" balance and a low "Loss Reserve" compared to other banks. That's not good. One big thing it has in its favor, is that if it has to repossess real estate on non-performing loans, it has an "inside position" on selling off those assets ("TV Pre-Owned").

Doesn't look like the healthiest bank in the state to me right now.

Skip

[SteveFromNY]

Originally Posted by 784caroline

StevefromNY

A point of clarification....Wachovia was taken over or bought out by Citibank. It did not fail requiring FDIC intervention.

Thanks for the clarification. However, I'd argue it's a technicality - given enough time and lack of a suitable buyer, failure would have happened. They were neither healthy nor prosperous.

[sbm]

Skip, I am not an employee of CFB and I am not speaking on their behalf. I am giving my opinion based on my knowledge of banking and as I said generally most community banks are doing fine. I think right now people need to remain calm about the current issues with the economy and yes, realize there are concerns, but not to overreact and place all banks in the same basket. We get enough national news talking about things such as how banks are not lending any money!! This is so incorrect and the general public gets the wrong picture. I am so glad I am retiring next year to move to TV and get away from all the regulations and political garbage.