BauerFinancial star ratings classify each institution based upon a complex formula factoring in current and historical data.The first level of evaluation is the capital level of the institution followed by other relevant data including, but not limited, to: profitability, historical trends, loan delinquencies, repossessed assets, reserves, regulatory compliance, proposed regulations and asset quality. Negative trends are projected forward to compensate for the lag time in the data. As a general guideline the following groupings were used:
Five Star: Superior. Typically, these institutions have at least twice the capital required by regulators, they are profitable (or posted a negligible loss), have excellent asset quality, a strong history and are not operating under any supervisory agreement(s).