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Bauer Financial ratings: Santa Cruz County Bank upgraded to five stars

September 23, 2011

By Jondi Gumz - Santa Cruz Sentinel

Bauer Financial, the Florida-based independent rating service, has upgraded Santa Cruz County Bank from four stars, excellent, to five stars, superior based on its second quarter performance.

The only other bank in the county with the top five-star rating is Union Bank.

Bauer's ratings make a difference to people looking for security for their savings.

"We have garnered new business as a result of our most recent rating," said Mary Anne Carson, senior vice president at Santa Cruz County Bank, a locally owned bank that opened in 2004.

Since Bauer began rating Santa Cruz Couny Bank in 2007, it has rated either four or five stars. The bank had a profitable second quarter with deposits up 7 percent and a decline in the nonperforming assets, loans on which payments are tardy.

Both Bank of the West, which opened in 1874, and Lighthouse Bank, a 3-year-old locally owned bank in Santa Cruz, rose from three stars signifying adequate to three and a half stars, good. Lighthouse has had eight consecutive profitable quarters, and Bank of the West six.

"We experienced loan growth in the second quarter in some areas despite the continued slow economic recovery," said Bank of the West spokesman Jim Cole, citing commercial loans, consumer installment loans and small business lending. "We were recognized in Money Magazine this month as the best regional bank in the West."

Rick Hofstetter, president and chief executive officer of Lighthouse Bank, said Lighthouse is at a disadvantage "by virtue of being a newer organization." He said the upgrade may be due to three record quarters of earnings and a lack of loan losses, but not because of a drop in nonperforming assets since that change occurred in July.

Liberty Bank was downgraded from three stars to two stars, problematic, after posting a loss of $2.8 million; nonperforming assets increased from 7.9 percent to 8.3 percent.

Ratings for credit unions serving Santa Cruz County were unchanged from the first quarter; Monterey Credit Union is privately insured rather than federally insured so it is not rated by Bauer.

"We are definitely headed in the right direction," said Karen Dorway of Bauer Financial, noting 40 percent of U.S. banks earned the top five-star rating, the most since Sept. 30, 2007.

She said 62 percent of banks and 69 percent of credit unions are recommended for earning four or five stars.

California has more financial institutions struggling, with 17 percent of banks troubled or problematic, compared to 12 percent nationwide, and 13 percent of credit unions troubled or problematic, which is double the national rate.

Bauer ratings, second quarter 2011

Banks Rating - 6/30/11 - 3/31/11 - Assets - YTD Income - %Non-performing assets

Bank of America - 3 stars - 3 stars - $1.4T - $4B - 4.2%

Bank of the West - 3 1/2 stars - 3 stars - $54.5B - $207.7M - 2.8%

Citibank - 4 stars - 4 stars - $1.2T - $1.9B - 1.5%

Comerica - 4 stars - 4 stars - $54B - $211.2M - 2%

JP Morgan Chase - 3 1/2 stars - 3 1/2 stars - $1.7T - $5.6B - 2.4%

Liberty Bank - 2 stars - 3 stars - $222.1M - ($2.4M) - 8.3%

Lighthouse Bank -3 1/2 stars - 3 stars - $119.3M - $664,000 -2.1%

Rabobank - 3 1/2 stars - 3 1/2 stars - $10.4B - $15M - 4.7%

Santa Barbara Bank & Trust* - 2 stars - 2 stars - $5.8B - $39.9M - 4%

Santa Cruz County Bank - 5 stars - 4 stars - $284.5M - $989,000 - 1.1%

US Bank - 4 stars - 4 stars - $291B - $2.2B - 3.3%

Union Bank - 5 stars - 5 stars - $77.8B - $499.3M - 1.4%

Valley Community Bank - 3 1/2 stars - 3 1/2 stars - $192.5M - $201,000 - 7.9%

Wells Fargo - 3 stars - 3 stars - $1.1T - $6B - 4.7%

Credit unions Rating - 6/30/11 - 3/31/11 - Assets - YTD Income - % Non-performing assets

Bay Federal - 3 stars - 3 stars - $620.3M - $1M - 1.3%

Monterey - No rating - No rating - $176.7M - $743,000 - .7%

Patelco - 3 stars - 3 stars - $3.6B - $14.8M - 2.6%

Santa Cruz Community - 3 stars - 3 stars - $89.1M - $835,000 - 4%

Santa Cruz County Employees - 4 stars - 4 stars - $25.2M - $15,000 - .2%

Watsonville Hospital - 4 stars - 4 stars - $10.5M - ($1,000) - 2.7%

Source: Bauer Financial

* Formerly Pacific Capital Bank

 

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