Nevada banking grades improve

Nevada financial institutions are no longer imploding with regularity, but a bank rating service says Nevada banks and credit unions still look shell-shocked.

Banks in Nevada are lagging the nation in financial strength, according to a report released by BauerFinancial of Coral Gables, Fla. The firm rated 60 percent of the nation's banks as superior or excellent at the end of March, but only 45 percent of banks in Nevada received that rating.

Nevertheless, Nevada banks are growing stronger financially, the firm said in its Friday report. A year ago, only 27 percent of Nevada banks rated superior or excellent.

BauerFinancial rates banks on a scale of zero to five stars.

The percentage of the state's troubled and problematic banks -- rated two stars or less -- dropped to 31 percent from 39 percent a year ago.

"We've probably found the bottom, and now the only direction to go is up," Nevada Bankers Association Chief Executive Officer William Uffelman said. "In some cases, we're maybe moving up a little." Giant national and regional banks, however, generally are getting better ratings than community banks that are independent, based in Southern Nevada and focused on lending to small businesses.

The number of Southern Nevada community banks rated zero stars for safety and soundness dropped to three on March 31 from five at the end of the year.

Getting zero stars are Bank of Las Vegas and 1st Commerce Bank, institutions controlled by Lansing, Mich.-based Capitol Bancorp, and First Asian Bank. Royal Business Bank of Los Angeles is awaiting regulatory approval to acquire First Asian.

In addition, BauerFinancial considered eight Southern Nevada-based banks "troubled and problematic."

Those eight institutions are 61 percent of community banks in Southern Nevada.

While the ratings are worrisome for individuals with large deposits and to businesses that rely on a community bank for loans, BauerFinancial noted that the average saver with less than $250,000 in a bank is fully insured by the Federal Deposit Insurance Corp. Similarly, federal credit union deposits are insured up to $250,000 by another federal agency, the National Credit Union Administration.

Among locally based banks, only Meadows Bank scored five stars. Kirkwood Bank came in next as the only four-star community bank based in Southern Nevada.

Bank of Nevada, the second-largest bank headquartered in Southern Nevada, edged up to three stars from two stars. Nevada State Bank, the largest state-chartered bank in Las Vegas, stayed unchanged at three stars.

Bank of George, Bank of North Las Vegas and First Security Bank improved during the first quarter, according to BauerFinancial.

Nevada Commerce Bank is the only Nevada chartered bank to fail this year, down from five failures in the state the prior year.

Among federally insured credit unions, Stage Employees is the only area institution rated zero stars.

Moapa Valley and Sonepco both dropped to two stars from three. The other credit unions with federal deposit insurance registered in the three-star category.

BauerFinancial doesn't rate credit unions that rely on private deposit insurance, such as Silver State Schools Credit Union, Clark County, Boulder Dam and Plus.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.