I am drafting the bank present's new year greeting right now, and thinking of including the recent exam result and rating briefly, since we've got a better one than before, for example BRR or MOU eliminated.

Is it okay to mention the fact in the president's new year greetings? I think it is okay because it's not a advertisement, just for the internal staff.

My worry is that if the greetings is sent to news press even though the rating result is not mentioned in the newspaper in the end, which I am not sure though), is it still okay? If it is not okay, I won't mention it in the greeting..

Thanks in advance for answering this question.

None public rating information from an exam cannot be disclosed.

To my knowledge, MOU's and the like are not confidential. However, if it could go public, I'm not sure I'd want to 'advertise' the bank was under one, even if it's been lifted.

I'm not sure what a BRR is. I can tell you (as Randy said above) your compliance or CAMELS rating cannot be disclosed. I would not put that out on any piece of paper that could end up in the wrong hands.

A number of years ago one of our commercial lenders put the CAMELS rating in a letter to a a potential client, who showed it to their current bank and asked why they didn't tell him their CAMELS rating. That bank reported us to the regulator and both the bank and lender got fined. Since that time, only those with a need to know are told the actual ratings. If you want to say you improved, that's one thing. But I would not let that information be broudly distributed to employees who may not keep their mouths shut.

Also, MOU's are not normally public information. Typically, only C&D's move to that level.

If the bank is publicly held it would normally have announced its MOU in its SEC filings and generally will follow up and advise when the MOU is lifted.

In your case, if the situation was not public in the first place, I would not mention it in the newsletter if there is a chance that can end up as public information.

Can I just say that I've never understood why CAMEL ratings must be kept so hush hush? It seems odd to me that a nursing home MUST publish their exam results and keep a copy available for public viewing but a similar service industry like a bank is told they cannot publish their results. That just makes it so much easier for the broad brush of big bad banks spin to be used on all of us, not just those who deserve it.

:steps off soap box:

One primary reason, to avoid a run on a bank, which can cause a bank to fail. Much different than a nursing home failure.

Regulators do not want consumers thinking that CAMELS ratings mean something to them. Unless the customer has more than the insured amount in a particular bank, the CAMELS rating is simply irrelevant to any decision a consumer might make. A "3" rated bank competing with two "1" rated banks in the same city could literally be put to death by consumers who thought it was unsafe. Deposit insurance is intended to be the great equalizer.

On the flip side, ratings assigned to nursing homes, restaurants, etc. are intended to affect consumer behavior. If I eat at a restaurant with a C rating or put Mom in a nursing home with a "poor" rating I've assumed some substantial risks. If either environment is septic in its own right, there is no government fix analogous to deposit insurance that negates the risks involved.

I would bet that any mention of "favorable" examination results in public communications (no matter how vague) would be pounced on by the regulators, regardless of whether the CAMEL was mentioned. It is simply inappropriate.

That is the first logical explanation I've read on the topic, Ken. Thank you for taking the time to spell it out.

The notion that "...deposit insurance is intended to be the great equalizer" is something that my myopic lending viewpoint had lost sight of.

Still, I wish there was something that was more easily accessible and understandable by the general public to help them better evaluate banks and chose the right one for them, rather than the one whose commercial they remember.

Excellent discussion from so many points - thanks

Still, I wish there was something that was more easily accessible and understandable by the general public to help them better evaluate banks and chose the right one for them

I think it comes down to getting a bank that offers a product that you want. It has nothing to do with ratings, unless you want to refer to the BBB or something similar. I have typically found that unless you want sophisticated services, your local home town gives the best service by far.

In a major SE city, the "Business Monday" newspaper had a recap of interest rates from 30+ banks. People would use that as a guide for their CD's. As long as they were below the FDIC cap, "all banks were the same" and the APY ruled. Lesson learned after talking to the CFO of our bank. He had his personal CD's in every problem bank. As long as the amount was under the FDIC cap, he was earning percentage points more than people banking with us.

I guess the other factors would be like Randy mentioned - products and proximity.