Majority of Fresno, Valley banks and credit unions earn top ratings

The majority of banks and credit unions headquartered in the central San Joaquin Valley appear to be in excellent financial shape, according to new ratings issued by a Florida bank analytics firm.

BauerFinancial reports that of the 10 banks based in Fresno and Tulare counties, seven earned the firm’s top five-star “superior” rating based on their financial data for the second quarter of 2015. Two received four-star “excellent” ratings, and one received a three-star “adequate” rating.

The marks represent a step up from the first quarter, when BauerFinancial gave the five-star superior rating to five of the banks. None of the Valley banks moved lower in the ratings. Two of the banks, Fresno’s Central Valley Community Bank and Bank of the Sierra in Porterville, both rose to five-star ratings in this report after receiving four-star ratings the previous quarter. Security First Bank in Fresno gained a half-star, from a “good” rating of 3 1/2  stars in the first quarter to four stars in the second quarter.

With a three-star rating, United Security Bank in Fresno was the lone local bank outside the top two tiers.

Among the 15 credit unions headquartered in Fresno, Kings and Tulare counties, 10 received five-star ratings and four were deemed four-star institutions – unchanged from the first quarter. Only one of the credit unions, the Fresno-based Fresno Police Department Credit Union, was unrated by BauerFinancial because it is not federally insured by the National Credit Union Administration.

On the Bauer scale, five- and four-star institutions are considered “recommended.” Banks and credit unions with two stars are considered “problematic,” and one-star institutions are deemed as “troubled.”

The ratings are derived from financial information provided by banks to the Federal Deposit Insurance Corp. and by credit unions to the NCUA, including total assets, capital ratios, quarterly and year-to-date income, and proportion of non-performing loans.

Across California, 81.3 percent of banks were in the recommended categories, up from less than 72 percent in mid-2014. Nationwide, the proportion of recommended five- and four-star banks was 81 percent, an increase from 75.4 percent after the second quarter of last year.

“Almost every state in the nation showed year-over year improvement in the number of recommended banks headquartered there,” BauerFinancial said in a written statement. Only three states – Idaho, Alaska and New Hampshire – had all of their banks among the five- and four-star recommended institutions.

Among credit unions, 81.8 percent of those based in California were in the two top recommended tiers, compared to 79.4 percent nationwide.

This story was originally published September 29, 2015 at 3:16 PM with the headline "Majority of Fresno, Valley banks and credit unions earn top ratings."