Comments on: Serendipity

By: Bryan

Bryan — Sat, 20 Sep 2008 00:12:21 +0000

I think you have to be really big and diversified to get the 5-star rating, Badtux. The smallest bank I saw with a 5-star is regional with locations in very different markets so that a down turn in one location won’t cause major stress.

Your credit union is at 14% liquidity, and they would probably prefer 15%.

It sounds good to me, and I wouldn’t have a problem with it.

By: Badtux

Badtux — Fri, 19 Sep 2008 21:27:23 +0000

Reading their analysis of my credit union, their main concern was liquidity. But my credit union has over $420M of liquid assets on their balance sheet (I picked up the latest financial statement at the credit union yesterday) and plenty of reserves to handle bad loans (and almost no exposure to credit card risk — you needed to have no debt and a 750 FICO to get a credit card there, even I don’t qualify for one of their credit cards!) so I’m not quite sure what the deal there is. In any event, looking at the balance sheet, I’m glad that my money is where it is, because they aren’t going anywhere.

This credit union is run by people who are tighter than Scrooge when it comes to money. For example, their overhead is 10% of what is typical for banks or credit unions of their size. They built a new HQ building after the lease on their old one ran out, for example (and their old one was a bunch of portable buildings on federal land that got sold off from under them to a private business to build a new office tower so they weren’t exactly living lavishly to begin with) but then they leased out a quarter of their new (modern but not particularly large and definitely *not* lavish) HQ building to a health club and about a quarter of their new HQ to various Lockheed-related contractors, which pays enough rent to pretty much pay the mortgage. And these are folks who are managing $3 billion in deposits! That’s just how they do things — they make every nickle squeak. Old school bankers. I like.

By: Bryan

Bryan — Fri, 19 Sep 2008 17:04:21 +0000

The ratings are quarterly, so they may stabilize, but now is not a time for risks.

By: Michael

Michael — Fri, 19 Sep 2008 13:47:14 +0000

Thanks for the link. My bank gets a 1 and 5 stars. But the bank my mom was considering switching to gets a 4G and 2 stars. I’ve sent her the link.

By: Bryan

Bryan — Fri, 19 Sep 2008 04:02:50 +0000

This tells whether they have been stretched too thin. I noticed that a couple of smaller banks in my area have bad ratings and I’m sure it is because of overexposure in the mortgage market and construction loans. They weren’t into the “new and improved” mortgages, but there have been a lot of defaults simply because people were building houses and condos on speculation and they never sold. So these banks are “land rich and cash poor” which is not good for a bank.

By: hipparchia

hipparchia — Fri, 19 Sep 2008 03:29:29 +0000

2, ****

i’ve mentioned before that i love my bank. glad to know i haven’t been wrong.

By: Bryan

Bryan — Thu, 18 Sep 2008 23:53:41 +0000

I know the feeling. My Mother has already moved some of her money based on the information.

By: Badtux

Badtux — Thu, 18 Sep 2008 21:07:13 +0000

Thanks for the link. My credit union has a low number (2) and four stars, so I suspect it’s pretty safe for now. That’s a relief!