Tucson-area banks and credit unions remain strong despite uncertainty

Banks and credit unions in Tucson and southern Arizona maintained financial strength in the second quarter, though a rise in consumer loan delinquencies nationwide raised concerns, according to the latest bank ratings from Bauer Financial.

Most banks and credit unions operating in the Tucson area have maintained their “superior” or “excellent” 4-star ratings from Florida-based Bauer, which has rated the financial strength of financial institutions since 1983.

But nationally, Bauer said, while most federally insured banks and credit unions remain strong, the percentage rated 2 stars — “troubled” or “problematic” — is at its highest percentage since. the third quarter of 2018, including more than 3% of institutions tracked, a number last seen in the third quarter of 2014.

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While serious delinquencies remain low, Bauer said that for the first time in several years, banks and credit unions are reporting an increase in delinquent loans at an early stage, missing one or two payments.

“It appears consumers have reached the tipping point between leveraging untapped value in their homes when rates were low and managing debt-to-income ratios as (interest) rates rise,” he said. Karen Dorway, president of Bauer Financial.

Old and new names

Southern Arizona banks and credit unions remain strong, for now.

Canyon Community Bank, based in Tucson, upgraded to 4 stars from a 3.5-star “good” rating after posting a second-quarter profit of $203,000.

Canyon, which is primarily owned by a group of Texas investors, regained its financial health after being placed under a consent order by the Office of the Comptroller of the Currency in 2013, and it had been rated as low only 1 star, or “problematic”, by Bauer in 2016.

The consent order was lifted last year, and Canyon is one of the best-capitalized banks in the state, with no “non-performing assets” — delinquent loans and foreclosed real estate — reported in the second quarter.

Tucson-based Commerce Bank of Arizona maintained its best 5-star Bauer rating and reported second-quarter profit of $783,000.

The trade was also under a regulatory order to raise capital a few years ago and had a “zero” Bauer rating in 2016, but the order was lifted in 2017 after the bank raised $13 million. dollars of new capital from local investors.

The only other bank to see its Bauer rating change in the second quarter was First Interstate Bank, which arrived in Arizona in February after merging with Great Western Bank, and saw its Bauer rating drop to 4 stars, from 5 stars in previous quarter.

Based in Billings, Montana, First Interstate Bank has nine branches in Arizona, including one in Tucson at 3002 N. Campbell Ave.

The First Interstate name and logo are familiar to longtime Arizonans, as the former Los Angeles-based First Interstate Bancorp was a major player in the state before it was acquired by Wells Fargo in 1996.

The bank now operating as First Interstate had operated branches in Montana and Wyoming under a franchise agreement with the former First Interstate Bank in the 1980s, then licensed the name and logo after the acquisition of Wells Fargo.

PNC settles down

Another relatively new name in the Tucson-area banking market is PNC Bank, which completed its acquisition of BBVA USA from its Spanish owner, Banco Bilbao Vizcaya Argentaria, in June 2021.

PNC, which has 13 branches in southern Arizona, maintained its 4-star Bauer rating in the second quarter, posting a profit of $1.4 billion.

Based in Pittsburgh, PNC Bank has assets of $534 billion and operates more than 2,600 branches in 27 states and the District of Columbia.

While the PNC name is relatively new around Tucson, BBVA USA used to be BBVA Compass and was previously owned by Compass Bancshares, which entered the Arizona market in 1998 with its acquisition of Arizona Bank. BBVA acquired Compass in 2007.

Although the name has changed, the PNC operation should remain familiar, since PNC has kept BBVA’s operations in Arizona and Tucson intact, including employees and management.

Longtime local banker Mark Mistler was kept on board as PNC’s regional president for Tucson and southern Arizona, and PNC kept BBVA’s roughly 150 employees in the region, he said. .

“We feel very lucky – PNC is a great bank,” said Mistler, who grew up in Tucson and joined Compass in 1999 after working for Valley National Bank and Bank One.

“PNC really liked the business we had in Tucson, so we’re looking to grow the business, not hurt it,” Mistler said.

Mistler cited PNC’s “Mainstreet banking model,” a local orientation that includes maintaining a regional president in most major markets where it operates.

“We are the fifth-largest commercial bank in the United States, but because of our structure, we can deliver like a small regional or community bank,” Mistler said, noting that a core group of local operation leaders worked together for some 30 years.

Mistler noted that PNC committed half a billion dollars in 2004 to its “Grow Up Great” initiative to support early childhood education and development. In Tucson, PNC is working with El Rio Health as the program’s first partner, Mistler said.

Another PNC program benefiting Tucson is its Community Benefits Plan, which launched in January.

The initiative will provide $88 billion nationwide in loans, investments and other financial support to boost economic opportunity for low- and middle-income people and communities, people and communities in color and other underserved individuals and communities over a four-year period.

“They have a great commitment to the local communities they serve, which is great for our community with Tucson being kind of a mid-sized city, you always hope that with any big bank or other big acquisition business, they continue to support the community,” he said.

Contact senior reporter David Wichner at [email protected] or 520-573-4181. On Twitter: @dwichner. On Facebook: Facebook.com/DailyStarBiz

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