We derive our ratings based upon the data we downloaded from regulators’ sites. Using different machine learning technologies, we calculate the failure rate of each financial institutions and assign ratings accordingly.
Every financial institution is rated as long as its data is available from the download. We make money from online ads. Rating results and online ads are completely independent.
The CAMELS rating system is the regulators’ own proprietary system and is confidential. We use the same rating scales of 1-5 as the regulators’, but with the opposite numerical order. Details of the government’s “Problem Bank” list is also confidential, even though the total number of banks on the "Problem Bank List" is public information (click this FDIC press release to see an example). We try to approximate the total number of “Problem Banks” with our Rating 1 and Rating 2 categories.
Ratings are updated 4 times a year, because we rely on the quarterly data published by regulatory agencies.
Every factor used in deriving the ratings is sorted on quarterly basis. If larger values mean stronger banks for a given factor, then it is sorted from small to large. The smallest 1 percent of all financial institutions will get the rank value of 1, and the largest 1 percent will get the rank value of 100. If larger values imply weaker banks for a given factor, then the factor is sorted from large to small. In this case, the largest 1 percent of banks will get the rank value of 1, and the smallest 1 percent of banks will get the rank of 100. In both situations, rank value of 100 always means the best, and rank value 1 always means the worst.
This measure gives you an intuitive sense of your bank’s relative position as compared with all other banks.