The FDICÂ grades banks based on Safety and Soundness. Here isÂ the FDIC’sÂ composite ratings definitionsÂ for Safety and Soundness/Risk Management.
|Safety and Soundness/Risk Management Examination Composite Ratings|
|One (1)||Financial institutions in this group are sound in every respect and generally have components rated 1 or 2. Any weaknesses are minor and can be handled in a routine manner by the board of directors and management. These financial institutions are the most capable of withstanding the vagaries of business conditions and are resistant to outside influences such as economic instability in their trade area. These financial institutions are in substantial compliance with laws and regulations. As a result, these financial institutions exhibit the strongest performance and risk management practices relative to the institution’s size, complexity, and risk profile, and give no cause for supervisory concern.|
|Two (2)||Financial institutions in this group are fundamentally sound. For a financial institution to receive this rating, generally no component rating should be more severe than 3. Only moderate weaknesses are present and are well within the board of directors’ and management’s capabilities and willingness to correct. These financial institutions are stable and are capable of withstanding business fluctuations. These financial institutions are in substantial compliance with laws and regulations. Overall risk management practices are satisfactory relative to the institution’s size, complexity, and risk profile. There are no material supervisory concerns and, as a result, the supervisory response is informal and limited.|
|Three (3)||Financial institutions in this group exhibit some degree of supervisory concern in one or more of the component areas. These financial institutions exhibit a combination of weaknesses that may range from moderate to severe; however, the magnitude of the deficiencies generally will not cause a component to be rated more severely than 4. Management may lack the ability or willingness to effectively address weaknesses within appropriate time frames. Financial institutions in this group generally are less capable of withstanding business fluctuations and are more vulnerable to outside influences than those institutions rated a composite 1 or 2. Additionally, these financial institutions may be in significant noncompliance with laws and regulations. Risk management practices may be less than satisfactory relative to the institution’s size, complexity, and risk profile. These financial institutions require more than normal supervision, which may include formal or informal enforcement actions. Failure appears unlikely, however, given the overall strength and financial capacity of these institutions.|
|Four (4)||Financial institutions in this group generally exhibit unsafe and unsound practices or conditions. There are serious financial or managerial deficiencies that result in unsatisfactory performance. The problems range from severe to critically deficient. The weaknesses and problems are not being satisfactorily addressed or resolved by the board of directors and management. Financial institutions in this group generally are not capable of withstanding business fluctuations. There may be significant noncompliance with laws and regulations. Risk management practices are generally unacceptable relative to the institution’s size, complexity, and risk profile. Close supervisory attention is required, which means, in most cases, formal enforcement action is necessary to address the problems. Institutions in this group pose a risk to the deposit insurance fund. Failure is a distinct possibility if the problems and weaknesses are not satisfactorily addressed and resolved.|
|Five (5)||Financial institutions in this group exhibit extremely unsafe and unsound practices or conditions; exhibit a critically deficient performance; often contain inadequate risk management practices relative to the institution’s size, complexity, and risk profile; and are of the greatest supervisory concern. The volume and severity of problems are beyond management’s ability or willingness to control or correct. Immediate outside financial or other assistance is needed in order for the financial institution to be viable. Ongoing supervisory attention is necessary. Institutions in this group pose a significant risk to the deposit insurance fund and failure is highly probable.|
Based on this composite guide, we, as ruthless, criminal, and thieving short sellers, want banks that have a rating of 4 or 5.
But the FDIC does not make it easy on us to short banks to zero. They do notÂ publicly publishÂ their ratings on banks. However, Bankrate does!!! In fact, the FDIC plainly lists Bankrate as a place to find out information about banks.
Bankrate publishes what it calls a Safe and Sound rating. Sounds remarkably similar to the FDIC’s Safety and Soundness rating. Odd, no? In fact, Bankrate’sÂ system is based on the same 5 point scale, except that a 1 is the highest rating for the FDIC and the lowest rating for Bankrate.
To begin using Bankrate’s composite rating system, go here: Safe and Sound Ratings.
Now, I’ve done some leg-work for you, as I know how you internet leeches want actionable lists and shit. What I’ve done is screened Bankrate for the 1 star banks (the lowest rated) in California. Of course, choose whatever state you want (Florida would be a safe bet). Here is the list:
Now, I’m sure you’re thinking, “Thanks Mr. Woodshedder. In between your fried chicken and dumplings, you managed to slap me upside the head with exactly what I was looking for. What can I do for you?”
I’m glad you asked. Please, if you look up some of these fuckers,Â list me the symbols in the comments section.