Bank > Safety & Soundness Message and FAQs
Safety & Soundness Message and FAQs
 Dear valued Thrivent Financial Bank client,
Banks and ongoing market volatility have been making headlines recently—and the news has been troubling. Many Americans are wondering about the security of their deposits and investments. If you have concerns, there are some things I'd like you to know.
The banking industry is carefully regulated to help reduce risk to customers. Thrivent Financial Bank is subject to these regulations, and your deposits are FDIC insured. This means your money will be available when you need it.
Thrivent Financial Bank is as strong as it's ever been. We've avoided subprime mortgages and other high-risk lending. That commitment to doing things the "right way" means we're able to serve you better—not just today, but always.
I hope this information will help you understand our commitment to honor the trust you have placed in Thrivent Financial Bank. We appreciate your continued business.
Sincerely,
Todd Sipe
President & CEO
FAQs: Bank Safety & Soundness
Q. What is Thrivent Financial Bank’s regulatory rating?
A. Regulatory requirements prohibit us from disclosing our overall Office of Thrift Supervision (OTS) rating, as well as the individual ratings for the aspects of our business on which the overall rating is based. These aspects include: capital, assets, management, earnings, liquidity, rate sensitivity and compliance.
However, we can tell you:
- Thrivent Financial Bank is well capitalized—actually twice the regulatory limit;
- The performance of our loan portfolio and the quality of our assets continue to perform above that of our peer financial institutions;
- Our liquidity position is strong based on strong asset-based liquidity and moderate reliance on alternative funding sources;
- And Thrivent Financial Bank is on target to have a record year in terms of profitability.
For more information, visit bankrate.com, an independent web site.
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Q. Is there a banking crisis?
A. Let's set the record straight: The banking industry—traditional federally insured, federally regulated depository institutions which include your local commercial bank, thrift or savings bank—is safe and sound. And your account in commercial banks, thrifts and savings banks carry FDIC insurance.
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Q. How do we know that?
A. Federally regulated banks are required to employ underwriting practices to avoid losses and to promote safe and sound operations. And when they do not operate appropriately, their regulators, who visit them annually, will take exception to such practices and require corrective action.
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Q. But I'm hearing and seeing so much news that keeps talking about the "banking" crisis. What gives?
A. The problem is that words matter. And when one word is used to mean several different things, it inevitably creates confusion. For example, we know what a bank is. But sometimes a business that wants to add status to its name will call itself a "bank" even though it is not an insured depository institution—such as a commercial bank, thrift or savings bank.
Bear Stearns, the investment house headquartered in New York City, was not a commercial bank. It was an investment "bank."
The word "bank" is also applied to mortgage firms. Their function, their purpose and their regulation differ from federally insured depository institutions. And in this time of market turmoil, it is worthwhile remembering that only commercial banks, thrifts and savings banks carry FDIC insurance.
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Q. How is Thrivent Financial Bank positioned to care for our deposits?
A. Very well. The banking industry is highly regulated to help reduce the level of risk to customers. Thrivent Financial Bank is subject to these regulations and your deposits are also FDIC insured. You can feel good about working with a bank that is strong, solvent and well-capitalized. We take the principle of stewardship to heart.
Thrivent Financial Bank didn't follow the market into the high-risk lending business, so we haven't had to make many changes in our lending practices. As a result, the bank has plenty of money to lend, and our liquidity is good.
As of March 30, 2008 our core capital ratio was 10.35%, well over the 5.0% that the OTS considers well capitalized. Thrivent Financial Bank is highly regulated by the OTS who closely monitors our financial results.
As of June 30, loan growth is 16.4% compared to the same time last year. We are making loans where some banks appear to be cutting back on their lending as they are internally focused on their individual credit quality concerns.
Thrivent Financial Bank is also a subsidiary1 of a fortune 500 organization which just had its rating reaffirmed by AM Best.
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Q. I'm confused about FDIC insurance. How much of my deposits are covered?
A. Thrivent Financial Bank is a member of FDIC (Federal Deposit Insurance Corporation). Through this program, the federal government insures deposits in checking and savings accounts, and retirement accounts (such as IRAs and Keogh plans).
FDIC exists to preserve and promote public confidence in the U.S. financial system by insuring deposits. Since the start of FDIC in 1934, no depositor has lost a single cent of insured funds as a result of a bank failure.
On Oct. 3, 2008, Congress passed new legislation temporarily increasing FDIC coverage for depositors of all banks that are members of the FDIC. The chart below shows the new and previous insurance coverage for common deposits.
| Account Type |
New Insurance Maximum* |
Previous Insurance Maximum |
| Single |
$250,000 |
$100,000 |
| Joint (50/50 ownership) |
$500,000 ($250,000 for each person) |
$200,000 |
| IRA deposits |
$250,000 per plan depositor |
$250,000 |
* Effective 10/3/08 through 12/31/09.
In applying the new coverage, below is an example of how a married couple would be covered for $850,500 in deposits:
| Account Owner |
Deposit Type |
Account Balance |
Amount Insured |
| Husband |
Savings account |
$100,000 |
$100,000 |
Wife |
Certificate of Deposit (CD) |
$250,500 |
$250,000 |
| Husband & Wife (50/50 ownership) |
Savings account |
$500,000 |
$500,000 |
| |
Total Account Balance & Amount Insured |
$850,500 |
$850,000 |
More information on FDIC insurance coverage.
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Q. What if there is a bank failure?
A. Customers' deposits are protected. Not one penny of insured savings has ever been lost by a customer of a federally insured bank.
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Q. Are banks prepared for economic downturns?
A. Virtually all banks in this country are safe and sound. Banks' capital and reserves—that is, rainy day funds for tough economic times—totaled $1.48 trillion as of March.
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Q. Who regulates banks?
A. That depends on the bank's charter. There are four federal regulators—the Federal Reserve Board; the Comptroller of the Currency; the Office of Thrift Supervision; and the Federal Deposit Insurance Corporation. The FDIC also insures deposits in its member banks up to $100,000 for regular accounts and up to $250,000 for retirement accounts. That insurance applies to accounts in FDIC member banks that are commercial banks, thrifts and savings banks.
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Q. So, how did some other institutions get in trouble?
A. Today's crisis underscores the fact that there are two ways financial institutions can fail. They can fail due to capital insolvency, or because they are liquidity insolvent. What many of those institutions are experiencing now is a lack of liquidity, not a lack of capital. Capital remains strong—strong for investment banks as well as for commercial banks and thrifts.
The liquidity crisis that we have seen on Wall Street comes from a crisis of confidence. In the 1930s, before deposit insurance, banks failed because of a crisis of confidence that led to liquidity insolvency. That can also happen to an investment "bank" such as Bear Stearns. When there is a crisis of confidence, lending lines are pulled, liquidity evaporates and insolvency is inevitable.
Thrivent Financial Bank remains ready, willing and able to meet the needs of our community and serve our customers.
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Additional Consumer & Banker Resources
FDIC guides to deposit insurance—in English, Spanish, Chinese, Korean
Frequently Asked Questions on Deposit Insurance (FDIC)
Electronic Deposit Insurance Estimator (FDIC)
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