Giving Credit Where Credit is Due

Giving Credit Where Credit is Due

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The 50 banks listed on page 5 of this week’s Jumbo Rate News each have two things in common:

1) They were established prior to 1883 (and are therefore at least 140 years old); and

2) They have each earned a 5-Star rating from Bauer for a minimum of 100 consecutive quarters (25 consecutive years).

Creating the list in this manner, impresses just how well these banks have been, and continue to be, run.  However, it may be a bit unfair to territories that had not yet become states by 1883. Nonetheless, Bauer has determined these 50 banks to be quite noteworthy.

Sadly, only 16 states are represented on page 5, when there were, in fact, 38 states in the union by 1883. A harsher reality is that even the original 13 colonies are not all represented. Virginia, for example, lacks representation. What it does not lack, though, is a selection of strong banks with storied histories.

5-Star American NB & TC, Danville, VA has been “strengthening communities since 1909” when it was established. It has also earned Bauer’s 5-Star rating continuously since 1989. Like many community banks, American National’s president wrote a letter to customers explaining what sets it apart from the banks in the news (a diverse and tenured customer base, well-positioned for an economic downturn, access to liquidity, etc.)

And like many banks, that letter is posted on its website. Unlike most banks, however, the bank’s president, Jeffrey Haley, included his cell phone number, so any     customer can call him directly. Now that’s a community banker.

Another original colony, South Carolina, is home to a number of banks that have earned over 100 consecutive 5-Star ratings. Only one of them was established prior to 1900. 5-Star Spratt Savings Bank, Chester, SC has been building relationships since 1892 and earning Bauer’s top (5-Star) Rating since 1992.

Even Georgia, which was hit particularly hard during the 2008 housing bubble, has several banks that have earned Bauer’s Top 5-Star rating for more than 25 years. One of those banks is 5-Star First National Bank of Waynesboro, GA.

Chartered in 1905, FNB has been helping its community grow for 118 years. It has been a top, 5-Star rated bank, for the last 33 of those years. More than just a bank, FNB is a proud sponsor of community events, like the annual Boss Hog Cook-Off and Christmas on Liberty Square.

A true community bank, at First NB, “it’s always been more than the money”. It’s four generations of the same local family serving the community’s local priorities by way of local decision-making.

The fact is, there are 376 banks that have earned Bauer’s top rating for at least the past 100 quarters. Almost all (367) of them are community banks. And, nearly every state has at least one bank in this highly esteemed category. The following states and territories, while they missed this criteria, are all home to at least one 5-Star bank: Arizona (8), Delaware (13), Hawaii (4), Nevada (9), Utah (23) as well as the District of Columbia (2) and even Puerto Rico, which is home to just three banks, has one rated 5-Stars. In other words, no matter where you roam in this great country of ours, you can find a 5-Star bank.

Texas and Illinois have long had the greatest numbers of banks (currently 387 and 370, respectively). So it comes as no surprise that they also have the greatest numbers of 5-Star banks. They do. In fact, Texas has more 5-Star banks than most other states have total banks (296). Over 76% of Texas banks have earned Bauer’s 5-Star Rating and 48 of them have earned that Top Rating for at least 100 consecutive quarters. Illinois comes in with similar numbers—268 or 72% rated 5-Stars and 41 earning that top rating for the past quarter century.

These states do NOT have the highest percentages of 5-Star banks, though.

One hundred percent of the eleven banks headquartered in Idaho are rated 5-Stars. The runner up is Maine, where 20 out of 23 banks are 5-Star Rated (87%). Four of those banks have been 5-Stars for 100 quarters or longer. Only one bank in Idaho can claim that: 5-Star First Federal Savings Bank of Twin Falls, ID.

Like American NB in Danville, VA, First FSB of Twin Falls has a personal note to customers from its president/CEO, Jason Meyerhoeffer on its website. Mr. Meyerhoeffer does not list his cell phone number, but he does have a pearl of wisdom to share. First FSB of Twin Falls has been in business since 1916 and has grown into a $1.4 billion asset bank. Yet, its most valued asset, according to Meyerhoeffer, is an intangible one. It is “the continued trust First Federal enjoys from its customers”.

You have probably noticed a common thread in the banks we have highlighted here. Aside from what we have already pointed out, these banks are all well-capitalized (by Bauer’s standards, not just by regulatory standards); they are well-diversified in their lending; and their greatest exposures are to the people and businesses within their own communities.

They know the business of banking; they’ve been doing it right for decades.

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