San Antonio, TX, August 19, 2025
News Summary
USAA is experiencing a downgrade in its credit ratings from both S&P Global Ratings and Moody’s Ratings due to significant challenges within its banking division, particularly the USAA Federal Savings Bank. With earnings diversity declining and compliance issues arising, the organization has seen its rating lowered from ‘AA+’ to ‘AA’. The bank, which previously contributed approximately $1 billion to USAA’s income, is currently reporting losses. Despite the challenges, USAA remains optimistic about future income improvements, expecting recovery in 2025 and 2026.
San Antonio, TX
USAA is facing a credit rating downgrade from two major credit rating agencies, S&P Global Ratings and Moody’s Ratings, which have revised its ratings due to struggles in its banking division. S&P Global Ratings lowered USAA’s rating from ‘AA+’ to ‘AA’, indicating a significant shift in the organization’s financial evaluations.
The downgrades are attributed primarily to the underperformance of USAA Federal Savings Bank (FSB), which has seen a notable decline in its earnings diversity. Once a robust contributor to USAA’s financial standing, FSB is currently facing serious compliance issues flagged by the Office of the Comptroller of the Currency (OCC).
Historically, until 2020, FSB generated approximately $1 billion annually for USAA’s consolidated GAAP pretax income. However, from 2020 to 2024, it reported an average pretax loss of $236 million, significantly impacting USAA’s overall financial health.
Despite the current setbacks, S&P anticipates a potential improvement in USAA’s consolidated income, including contributions from its banking operations, in 2025 and 2026. Although the predicted recovery could be optimistic, it is not expected to reach the historical standards seen prior to the bank’s difficulties.
In contrast to the downgrades, USAA has maintained a narrative surrounding its financial strength and commitment to member service. They assert that they remain highly rated by all three applicable credit rating agencies and report strong financial performance, with various measures nearing record levels. In the past year, USAA has added over 1 million new members, highlighting robust capital levels and healthy business operations as indicators of stability.
Credit Rating Downgrade Key Points
| Credit Rating Agency | Previous Rating | New Rating |
|---|---|---|
| S&P Global Ratings | AA+ | AA |
| Moody’s Ratings | (Previously not stated) | (Downgrade confirmed) |
Recent Performance and Changes
To better understand the financial dynamics at play, it is essential to examine the recent performance trend of USAA and its banking segment. The outlook reflects a combination of struggles in compliance issues and the challenge to return to previous income levels.
| Year | FSB Pretax Income (Loss) |
|---|---|
| 2020 | $1 billion (profit) |
| 2021 | -$236 million (loss) |
| 2022 | -$236 million (loss) |
| 2023 | -$236 million (loss) |
Looking Ahead
For the upcoming years, analysts predict a cautious recovery for USAA, driven by a stronger focus on compliance and strategic operations within USAA Federal Savings Bank. However, achieving historical performance levels is a long-term goal that the bank must strategically navigate to regain investor confidence.
FAQ
What led to the credit rating downgrade for USAA?
The downgrade was primarily due to the weakened earnings diversity related to USAA Federal Savings Bank and compliance issues cited by the Office of the Comptroller of the Currency.
How much did USAA Federal Savings Bank contribute to the organization before 2020?
Until 2020, USAA Federal Savings Bank contributed about $1 billion annually to USAA’s consolidated GAAP pretax income.
What are the expected future earnings trends for USAA?
Analysts expect that USAA’s consolidated income will improve in 2025 and 2026, but projections indicate it may not reach historical earnings levels.
Deeper Dive: News & Info About This Topic
HERE Resources
Additional Resources
- NEWS4SA: USAA Credit Ratings Downgraded
- Wikipedia: USAA
- Express News: USAA Moody’s Downgrade
- Google Search: USAA Credit Rating
- Express News: Partner Credit Score
- Google Scholar: Credit Score Studies
- Axios: Credit Score in Bexar
- Encyclopedia Britannica: Credit Rating
- Express News: Gen Z Credit Score Knowledge
- Google News: Credit Score
Author: STAFF HERE SAN ANTONIO WRITER
The SAN ANTONIO STAFF WRITER represents the experienced team at HERESanAntonio.com, your go-to source for actionable local news and information in San Antonio, Bexar County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Fiesta San Antonio, San Antonio Stock Show & Rodeo, and Dia de los Muertos. Our coverage extends to key organizations like the Greater San Antonio Chamber of Commerce and United Way of San Antonio and Bexar County, plus leading businesses in retail, insurance, and energy that power the local economy such as H-E-B, USAA, and Valero Energy. As part of the broader HERE network, including HEREAustinTX.com, HERECollegeStation.com, HEREDallas.com, and HEREHouston.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
