AmTrust's problems stemming from bad loans are well known, and Florida-based BauerFinancial is only confirming that. Bauer analyzes the financial statements banks submit to federal regulators and then assigns a star rating between zero and five, with three stars considered an adequate financial condition.
Based on 2008 numbers, AmTrust now has zero stars. Karen Dorway is BauerFinancial's president.
DORWAY: Certainly a zero star indicates some serious challenges, but it does not mean they cannot be overcome.
Dorway says all signs suggest that AmTrust is moving in the wrong direction. In 2008, it lost $454 million dollars.
But Dorway says the bank remains within regulator's capital requirements, and reminds depositors that their money is completely safe if they keep under the FDIC limits. And, while banks with a zero star rating are more likely to fail, she says many are acquired or work their way back to health. An AmTrust spokesperson did not return a call for comment.