Banks and credit unions across Southern Arizona and the nation remained strong in the second quarter, with many banks rolling back big loan-loss reserves they made in the face of the pandemic, according to the latest report by Florida-based Bauer Financial.
Southern Arizona banks and credit unions maintained their Bauer “star” ratings in the second quarter ended June 30, with most rated four stars (excellent) or five stars (superior) in the closely watched Bauer report.
One major bank operating in Southern Arizona, BBVA USA, posted a $652 million second-quarter net loss, after taking a $1.9 billion net loss for all of 2020 on impairment charges related to the COVID-19 pandemic.
But BBVA maintained its five-star Bauer rating with strong cash reserves.
Great Western Bank posted a loss of $671 million last year after taking more than $700 million in COVID-19-related charges, but the bank reported second-quarter 2021 income of about $61 million.
Most U.S. banks have been able to reverse losses related to huge loan-loss reserves they made last year as an expected onslaught of loan defaults fizzled out, Bauer said.
Among locally based banks, Commerce Bank of Arizona maintained its four-star Bauer rating and posted a second-quarter profit of $945,000 after earning net income of $2.9 million last year.
Locally owned Commerce was under a regulatory order to increase its cash reserves a few years ago but after recapitalizing, its earnings have rebounded while its non-performing assets shrunk to below 1%.
Canyon Community Bank, which is locally based but majority-owned by a Texas investment group, also turned around its fortunes despite the pandemic.
Canyon earned $378,000 in the second quarter and has posted income of $563,000 through the first half of the year, after a reporting a loss of $580,000 for all of 2020.
Canyon, which also raised millions of dollars several years ago to shore up its balance sheet under a regulatory order, maintained its three-start Bauer rating.
Meanwhile, Arizona credit unions operating here all maintained their Bauer ratings, with locally based Vantage West, Pima Federal, Tucson Federal Pyramid Federal all keeping five-star ratings.
