Credit Union and Bank Safety Ratings Continue to Improve

The financial health of the nation’s banks and credit unions ended 2012 at the highest level since the recent economic downturn began five years earlier, new figures show.

Bank and credit union ratings from Bauer Financial, a Florida-based bank research firm, found that 69.5 percent of banks were recommended by Bauer, receiving four or five stars. That is the highest percentage since the fourth quarter of 2007.

Only eight banks failed during the fourth quarter of 2012, while 43 improved enough financially to be removed from Bauer’s troubled and the problematic designations (one or two stars). Excluding three banks that have failed so far in 2013, the number of banks labeled by Bauer as “troubled and problematic” now stands at 663, the lowest level since the fourth quarter of 2008.

The financial safety ratings of banks vary widely based on the state.

In North Dakota, 87.8 percent of banks were recommended (4 or 5 stars) by Bauer, while only 1.1 percent were labeled troubled and problematic (1 or 2 stars). In New Hampshire, 95 percent of banks were recommended by Bauer while 0 percent were troubled or problematic.