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Published: Saturday, 3/16/2013

Previously distressed credit union now ‘excellent'

Research firm applaudsToledo Urban turnaround

BY JON CHAVEZ
BLADE BUSINESS WRITER
Cowell Cowell
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Just two years ago, Toledo Urban Federal Credit Union was a financial institution in jeopardy with a rating of zero stars out of five possible by BauerFinancial, Inc., a leading bank research firm that rates banks and credit unions.

But this week, Toledo Urban, which has worked since March, 2011, to improve its financial resume, earned four stars and an “excellent” rating in the Florida rating service’s report for 2012’s fourth quarter.

The news took the breath away of the credit union’s chief executive officer, Suzette Cowell, who was concerned over whether the institution would maintain the three-star “adequate” rating Toledo Urban finally achieved in the first quarter of last year.

“I knew we had really worked hard, the board, the staff, and even our members. But this ... I’m still sitting here thinking about it,” Ms. Cowell said. “Oh my God. I don’t need to say, to tell you what this means.”

The credit union is at 1339 Dorr St.

Karen Dorway, BauerFinancial president, said Toledo Urban had been “progressing and improving over the last years. Looking at their profitability, it’s up.”

Ms. Dorway said the credit union’s capital-to-asset ratio had decreased slightly, but that was to be expected because Toledo Urban’s membership had increased.

“What stands out is they have decreased their nonperforming assets from 4.5 percent [two years ago] to just 1.6 percent in the last quarter,” she said. “They’ve also turned profitable, which has not been the case before.

“It’s a tiny little credit union, but they have really progressed,” she added.

In its fourth-quarter report, BauerFinancial noted few changes among northwest Ohio and southeast Michigan banks and credit unions.

First National Bank of Pandora in Putnam County saw its rating slip from five stars to four, and two area credit unions saw their ratings slip: Cando Credit Union of Walbridge went from four stars to three, while Sylvania Area Federal Credit Union dropped from five stars to four in the latest ratings.

The Bank of Maumee, which has struggled the last year, remained at a one-star “troubled” rating, while Monroe Bank & Trust maintained its two-star “problematic” rating, according to BauerFinancial.

Toledo Teamsters Federal Credit Union also kept a two-star rating.

Among Ohio’s largest banks, Columbus-based Huntington Bancshares earned its first five-star rating.

Huntington joins Ohio’s other biggest banks — Cleveland-based KeyBank and Cincinnati-based Fifth Third Bank — with five-star ratings. It is the first time all three have had five-star ratings.

However, BauerFinancial said, nationally, the financial industry appears to be making a comeback.

As of the end of 2012, 69.5 percent of banks had either four-star or five-star ratings, a number not seen since 2007’s fourth quarter. Meanwhile, only eight banks failed in the fourth quarter of 2012 and 43 improved enough to be removed from the one-star and two-star ranks.

The number of troubled or problematic banks in the United States is at 663, the lowest number since the third quarter of 2008.

Credit unions with a four-star or five-star rating nationwide totaled 76.1 percent of all credit unions, the third consecutive quarter the total exceeded 75 percent. Only 3 percent of federally insured credit unions are rated two stars or below, BauerFinancial said.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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