Community Banking’s Most Elite

Community Banking’s Most Elite

Most Elite Community Banks

Thirty-four years ago (1983), Jumbo Rate News became the first, and only, CD listing service to limit the banks it would list to strong, credit-worthy banks. Reaching for yield meant nothing if the bank was not going to live to carry the CD to term. If it failed and its deposits were taken over by another bank, the original CD terms were void and, in general were dropped down to passbook (savings account) rates.

Back then, in order to accomplish our self-imposed mandate, the banks had to be evaluated  manually, one by one. As time went on, however, Bauer developed a system to evaluate all savings and loans, then banks, and eventually, credit unions. Bauer’s star-rating system was created in December 1988 based on June 1988 financial data, and has since become the industry standard.

All banks and credit unions rated 5-stars or 4-stars are unconditionally recommended by Bauer. However, especially after the trails of the 2008 recession, Bauer wanted to further elevate 5-Stars institutions that were able to navigate their way through without losing their 5-star status, a new designation—Best of Bauer—was born.

Best of Bauer banks and credit unions have earned and maintained a 5-star rating for 25 straight years. That’s 100 consecutive quarters, a quarter of a century… or more! There are currently 365 banks and 358 credit unions that have earned this distinction, or a little over 6% of the industry.

Bauer also believes that longevity in and of itself deserves recognition. For our page 7 list this week, we  honor the oldest U.S. Banks that have also earned the Best of Bauer distinction. All of the banks listed on page 7 are more than 130 years old and all have earned Best of Bauer status. For example, the Institution for Savings in Newburyport, MA is the oldest Best of Bauer bank (established in 1820). But it’s not the oldest bank overall.

A handful of Big Banks are just as old or older. Which brings us to another point: all of the banks listed on page 7 are community banks. That’s no accident.

Community Banks are much more likely than their larger counterparts to keep an adequate capital cushion… just in case. They are much less likely to make risky investments than non-community banks. They know their customers at a personal level which provides invaluable inside knowledge prior to issuing loans. And, they work towards common, unified goals with the people they serve.

Working together helps to create a stronger community, which in turn, creates a stronger community bank. Our congratulations go to all for a job continually well done.

The Northeast may seem disproportionately represented on page 7 but as you can see from this chart, nearly 10% of the Northeast Region (Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont) are Best of Bauer. That’s by far, the highest percent in the nation.

Conversely, the Western Region (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington, Wyoming and Pacific Islands.) has just 1.62% – far below the national average of 6.27%.

The other regions are:

Southeast, which includes AL, FL, GA, MS, the Carolinas, TN, VA, WV, PR and the U.S. Virgin Islands;

Central: contains IL, IN, KY, MI, OH and WI;

Midwest: IA, KS, MN, MO, NE and the Dakotas; and

Southwest: which encompasses AR, CO, LA, NM, OK and TX. The is the only region that managed to exceed the national Best of Bauer average for both banks and credit unions.

BONUS: Supplemental pages are included  in this week’s newsletter to recognize ALL of these top performing banks. Congratulations!

Best of Bauer Banks and Credit Unions