June 11, 2013: Newly released bank and credit union ratings from BAUERFINANCIAL, Inc., the nation’s bank rating firm, indicate that the U.S. banking industry has weathered the storm. The percentage of banks recommended by the firm (i.e. rated 5-Stars or 4-Stars) exceeds 70%, a number we have not seen since the fourth quarter of 2007. Nearly 76% of federally insured Credit Unions earned the coveted recommended status with this latest update.
There is a caveat to these numbers, however. Nearly 20% of both the nation’s banks and credit unions have disappeared in the last six years, either through a voluntary merger/ acquisition or by being closed by regulators. Where six years ago we had 8,651 banks and 8,478 federally insured credit unions, today we have just 6,982 and 6,895, respectively. The elimination of floundering institutions is a big reason for the rise in recommended banks and credit unions. Those able to survive the tumultuous financial crisis that defined the past six years, are as a rule, on very good footing.
Don’t be lulled into a false sense of security, though. Over 800 financial institutions are currently rated 2-Stars or below and therefore relegated to Bauer’s Troubled and Problematic Reports. How do you know where your bank or credit union falls? It’s simple, just visit www.bauerfinancial.com to find out for free.