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Most local banks’ ratings hold steady or improve

The apparent stabilization of the economy is reflected in San Diego’s banking sector, as star rankings show most local banks have either held steady or improved since last quarter.

Only one bank, Security Business Bank of San Diego, saw a decline in its rating, according to BauerFinancial Inc. It lost one star to fall from superior to excellent.

Four banks saw their rating go up.

Karen Dorway, president of BauerFinancial, said that San Diego’s numbers were in line with national trends, which appear to be positive.

“We had seen a couple of quarters of what seemed to be some leveling off, but this is the first quarter where it’s been a little better,” Dorway said.

BauerFinancial is a Florida-based ratings firm that assigns U.S. banks and thrifts a certain number of stars each quarter, based on capital ratios, profitability-loss trends, levels of delinquent loans, charge-offs, liquidity and historical data, among other criteria.

Under the system, five stars equals a ranking of “superior”; four stars is “excellent”; three and a half stars is “good”; three stars is “adequate”; two is “problematic” and one is “troubled.”

Nine of the 24 San Diego County banks rated had a score of excellent or superior. Three banks -- Metro United Bank, Neighborhood National Bank and Sunrise Bank, all in San Diego -- had less than three stars. They each had two, as they did last quarter, signifying they are “problematic.”

Dorway said that about 1,000 banks remain troubled or problematic nationwide. There are still parts of the country with more of these banks than others. San Diego is one of the stronger areas with only two.

“We’re not out of the woods by any stretch,” she said. “But we are seeing things gradually improving.”

Both Metro United and Neighborhood National experienced year-to-date profit losses. Neighborhood National lost less than a million dollars, down $675,000. Metro United took a larger hit, losing about $2.5 million.

The rest of the banks were all rated either good or adequate.

One bank that appears to be off to a good start in the rankings is Vibra Bank of Chula Vista. A startup bank, BauerFinancial previously considered Vibra too new to rank, but in the recent rankings it received a four-star “excellent” ranking.

“It’s nice. A lot of people look at those ratings and rely on them,” said Scott Parker, president and chief executive officer of Vibra Bank.

Vibra has been open for about two and a half years he said, and BauerFinancial generally waits that long before rating a bank. Parker said Vibra has strong capital numbers and few delinquent loans, key indicators BauerFinancial looks at.

While the financial information accompanying BauerFinancial’s most recent rankings -- which were as of Sept. 30, 2010 -- Vibra had experienced a quarterly loss of about $200,000, Parker said the bank’s most recent quarter, ended Dec. 31, saw the bank turn a profit for the first time.

“We think that we’ve reached the trough and we’re slowly climbing our way out,” Dorway said. “I do expect it to be a slow process.”

Bank stars

Five Stars: Balboa Thrift & Loan Association; Bank of Internet USA; Embarcadero Bank; Rancho Santa Fe Thrift & Loan Association; San Diego Trust Bank

Four Stars: California Community Bank; Regents Bank N.A.; Security Business Bank of San Diego; Vibra Bank

Three-and-a-half stars: Bank of Southern California; Silvergate Bank; Torrey Pines Bank

Three Stars: Armed Forces National Bank; Borrego Springs N.A.; California Bank & Trust; Coronado First Bank; Home Bank of California; Pacific Trust Bank FSB; Pacific Western Bank; San Diego Private Bank; Seacoast Commerce Bank;

Two Stars: Metro United Bank; Neighborhood National Bank; Sunrise Bank

One Star: None

Zero Stars: None

Source: BauerFinancial Inc.

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