Steady was the word of the quarter for San Diego’s banks through the first part of the year.
In the bank star rankings by the Florida-based analysis firm BauerFinancial, most of the region’s banks retained the same ranking they had in the quarter ended March 31, 2011 as they did in the previous quarter. Two rose, but only by half a star.
“Overall, we did see a stabilization,” said Karen Dorway, president of BauerFinancial, noting that San Diego was largely in line with the rest of the country. “Its good news that we are seeing improvement, unfortunately it’s not as quick as we’d like to see it around.”
BauerFinancial’s bank star ratings look at banks’ capital ratios, profitability-loss trends, levels of delinquent loans, charge-offs, liquidity and historical data and other criteria and rank them accordingly. Five stars represents an “excellent” rating, four stars indicate a bank is “superior,” three and a half stars mean “good,” and three stars mean “adequate.” If a bank receives two stars it is considered “problematic,” and one star means it is “troubled.”
Banks given a zero-star ranking are "facing considerable challenges at this time.”
In San Diego, there were five banks with five stars, four with four stars, two with three and a half stars, six with three stars, and three with two stars. No banks had less than two stars.
These rankings put San Diego ahead of California and the nation as a whole on. In the state, just under 40 percent of banks were recommended, meaning they got at least three stars. Nationwide, 61 percent were recommended. In San Diego, 85 percent were recommended.
The two banks that saw their rankings rise in San Diego were Seacoast Commerce Bank in Chula Vista, which went from three stars to three and a half, and Torrey Pines Bank, which went from three and a half stars to four.
Richard Sanborn, president and chief executive of Seacoast Commerce Bank, said that while BauerFinancial’s rankings were done independently and he couldn’t say for sure why his bank had seen improvement, they have had four consecutive strong quarters.
“We’ve done a lot to improve our problem credits as well as work on revenue generation as well as income,” he said. “We’ve had positive returns for our shareholders, some of the best around.”
Sunrise Bank, Neighborhood National Bank and Metro United Bank, all in San Diego, are still considered “problematic.”
Dorway said that while stabilization wasn’t necessarily a bad thing, the banks, along with the rest of the economy, are taking a long time to completely pull themselves out of the recession and start growing. “It’s on the slow side,” she said.