Financial ratings for several Toledo-area banks and credit unions improved during the first quarter over the previous quarter, led by the Toledo Urban Federal Credit Union, whose officials have worked diligently over the last year to improve its fiscal portrait.
The tiny credit union on Dorr Street received three stars in the latest report by BauerFinancial Inc. of Coral Gables, Fla., a leading bank research firm that rates banks and credit unions from zero to five stars, based on an financial stability.
Two-star institutions are "problematic," and one star means "troubled."
For five straight quarters Toledo Urban received no stars and was seen as one of the area's more troubled institutions. But last year its officials began a communitywide turnaround effort, holding a fund-raising drive, seeking mentoring from area bank presidents, and even asking former Toledo mayor Carty Finkbeiner to lobby on their behalf.
Karen Dorway, president of BauerFinancial, said Toledo Urban's three stars -- which classifies an institution as "adequate" -- were well deserved.
"They have seen some improvements in several areas," Ms. Dorway said. The credit union's ratio of capital reserves to total assets rose to 8.06 percent in the first quarter from 3.92 percent in the first quarter of 2011. The federal National Credit Union Administration requires credit unions to have capital reserves of at least 7 percent of total assets.
"They're still finding challenges on the profitability side. They had a quarterly loss of $4,000," Ms. Dorway said. But nonperforming loans were $80,000 in the first quarter, down from $247,000 a year ago. Toledo Urban had no repossessed assets in the quarter, which is good, she added.
Suzette Cowell, Toledo Urban's chief executive officer, was thrilled by the three-star rating.
"Wow! All I can say is Wow," she said. "It really was the community coming together to help make this happen. … It just shows what happens when everybody rolls up their sleeves to do the best you can do."
Five other northwest Ohio credit unions improved their ratings. Bay Area Credit Union in Oregon and Fremont Federal Credit Union in Fremont rose to five-star "superior" ratings, and Focus Federal Credit Union in Toledo and Local 50 Plumbers & Steamfitters Federal Credit Union in Northwood got four-star "excellent" ratings. Toledo Teamsters Federal Credit Union increased to a two-star "problematic" from a previous one-star rating.
The Bauer report kept two local banks at undesirable ratings. Bank of Maumee kept its one-star rating, and Monroe Bank & Trust in Monroe stayed at two stars.
Contact Jon Chavez at: firstname.lastname@example.org or 419-724-6128.