Iowa banks, credit unions see improvement in first quarter

Iowa banks and credit unions improved in profitability and fewer banks were on the "troubled or problematic" list at the end of the first quarter, according to BauerFinancial.

Federal Deposit Insurance Corp. data analyzed by the Coral Gables, Fla., independent bank research firm showed 84.5 percent of Iowa banks were recommended in terms of their financial strength on March 31, up from 79.7 percent on March 31, 2011.

BauerFinancial said 2.6 percent of Iowa banks were rated troubled or problematic at the end of the first quarter, down from 3.7 percent that made the list at the end of the first quarter of 2011.

BauerFinancial ratings are five-star, superior; four-star, excellent; three-star, adequate; two-star, problematic; one-star, troubled; zero stars, lowest rating.

Two West Des Moines financial institutions, First Bank and Liberty Bank, are ranked zero or no stars, the lowest rating.  Nonperforming loans, those 90 days or more past due and not accruing interest, have caused problems for both banks.

Federal regulators have required Liberty Bank to raised additional capital. The bank, which has been operating under tightened regulatory scrutiny since July 2011, has been selling off branches and reducing overall  employment.

Patriot Bank of Brooklyn, with one star, is the lowest rated Eastern Iowa bank.  The bank has taken steps to improve its financial condition.

Iowa banks posted combined net income of $220 million in the first quarter, up from $164 million in the same quarter of 2011. Total earning assets increased $3.1 billion, to $65.2 billion.

Iowa credit unions ended the first quarter in good financial condition, according to data from the National Credit Union Association analyzed by BauerFinancial.

No Iowa credit unions were rated as troubled or problematic, and 82.5 percent were recommended at the end of the first quarter on March 31, compared with 76.9 percent recommended at the end of the first quarter of 2011.

Veridian Credit Union of Waterloo, the state's largest credit union, ended the first quarter with assets of $2.2 billion and net income of $7.3 million.

University of Iowa Community Credit Union of Iowa City, the second-largest credit union in Iowa, ended the quarter with assets of $1.5 billion and net income of $7.9 million.

Iowa's third-largest credit union, Dupaco Community Credit Union of Dubuque, closed the first quarter with assets of just over $1 billion and net income of $4.2 million.

UI Community Credit Union, which opened a branch last year on the perimeter of Westdale Mall in Cedar Rapids, is building a full service office at East Post Road and Highway 100 in Marion. The 5,800-square-foot facility is scheduled to open in 2013.

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