All but two community banks with headquarters in Fresno and Tulare counties, as well as most Valley-based credit unions, earned five-star ratings from a Florida research company based on their financial performance in the second quarter of 2016.
“As a rule, banks and credit unions are operating with very strong capital positions,” according to a nationwide assessment by BauerFinancial Inc. “Over 85 percent of banks and 80 percent of credit unions are now rated either 5 stars or 4 stars” – levels at which BauerFinancial analysts deems financial institutions to be “recommended.”
The Coral Gables bank-rating firm added, however, that banks and credit unions with heavy exposure in commercial or industrial lending are feeling the effects of the lower quality of those loan assets.
Of nine community banks headquartered in the Valley, seven received BauerFinancial’s five-star rating, as did 11 of the Valley’s 15 locally based credit unions.
Of nine community banks headquartered in the four-county Valley region, seven received the five-star or superior rating: Central Valley Community Bank, Premier Valley Bank, Fresno First Bank and Murphy Bank, all based in Fresno; Porterville-based Bank of the Sierra; and Valley Business Bank and Suncrest Bank, both headquartered in Visalia.
Security First Bank in Fresno received a four-star or excellent rating, while Fresno-based United Security Bank had 3 1/2 stars or a good rating.
Among the 15 credit unions with headquarters in the Valley, 11 were deemed as five-star institutions: Educational Employees Credit Union, Fresno County Federal Credit Union, San Joaquin Power Employees Credit Union, United Local Credit Union, First California Federal Credit Union, Fresno Fire Department Credit Union, Greater Valley Credit Union and Fresno Grangers Federal Credit Union, all in Fresno; Families and Schools Together Credit Union and Kings Federal Credit Union, both in Hanford; and Valley Oak Credit Union in Three Rivers.
Tucoemas Federal Credit Union in Visalia, Tulare County Federal Credit Union in Tulare and So Val Tel Federal Credit Union in Fresno received four-star ratings. One other credit union, the Fresno Police Department Credit Union, was not rated by BauerFinancial because its shares are insured by an institution other than the National Credit Union Administration.
The ratings are based on quarterly financial data provided by banks to the Federal Deposit Insurance Corp. and by credit unions to the NCUA. Among the factors considered in the ratings are total assets, capitalization, quarterly and year-to-date income, and the proportion of loans on which borrowers are unable to make payments.