Forbes’ Best State Banks and Credit Unions 2022

The country’s 4,839 regional and community banks and 5,041 credit unions are very different financial animals from the largest banks in the United States. The giant banks derive substantial revenue from their trading desks, investment banking divisions and global lending operations. In contrast, smaller banks and credit unions operate a more streamlined business model, often focusing exclusively on the core banking functions of accepting deposits and making loans.

This focus on blocking and fighting the banking sector means that smaller financial institutions provide a much clearer window into what is happening in the real economy. It also highlights the importance of customer satisfaction and loyalty to the success of a business, especially in today’s economic environment.

During the Covid-19 pandemic and throughout the rapid economic rebound, macroeconomic forces have aligned in favor of the financial sector, as billions of dollars in federal stimulus checks and Paycheck Protection Program loans passed through the banking system. Consumers were eager to borrow for bigger homes and new cars, and fewer were falling behind on their payments.

The difference between short-term and long-term interest rates was also helpful. Banks tend to borrow short-term and lend money longer-term for mortgages and autos at rates that tend to track 10- and 30-year government bond yields. Profit is the amount net of interest, with banks making more money as the spread widens between the interest rates at which they can borrow and those at which they lend.

Over the past two years, smaller banks and credit unions have flourished as long-term rates began to rise sharply, while short-term rates remained at historic lows near zero. When this spread narrows, the most efficient banks will be better equipped to handle the lower spreads.

Click here to see full coverage of the top US banks in every state.

The economic environment in which banks and credit unions operate is becoming increasingly challenging, with the Federal Reserve and other central banks around the world continuing a committed program of near-term rate hikes to fight inflation the highest for more than 40 years. By design, the goal is to slow the economy and curb rising prices by making borrowing more expensive for banks, businesses and consumers.

As economic tailwinds diminish and perhaps turn into headwinds, the imperative to maintain customer relationships takes on even greater importance and becomes a more pressing matter for smaller banks and credit unions. Companies with the highest levels of customer satisfaction will enjoy a long-term competitive advantage over practitioners less adept at pleasing and retaining customers.

The fifth annual Forbes ranking of Best State Banks and Credit Unions offers a comprehensive overview of the elite of small US financial institutions.

Forbes has again partnered with market research firm Statista to conduct in-depth interviews with more than 26,000 US citizens from all 50 states about the financial institutions where they hold accounts. Customers provided an overall satisfaction score and responded if they would recommend an institution to friends and family. They also answered a battery of detailed questions about satisfaction in six key areas: trust, terms and conditions (including reasonable and transparent fees), in-branch services, digital services, customer service and financial advice. .

Click here to see full coverage of the top US banks in every state.

Institutions that have branches in more than 14 states are excluded from the ranking, which excludes large national banks like Bank of America.
BAC
JPMorgan Chase
JPM
Bank and Wells Fargo
WFC
. With over $150 billion in assets and 11.3 million members, Navy Federal Credit Union was the only credit union omitted from the rankings due to its massively disproportionate scale compared to other credit unions.

Between one and five banks and credit unions in each state received the Best-In-State designation, based on the number of responses in each state. Each bank and credit union received, on average, complete responses to 50 surveys, which asked consumers about topics ranging from the ease of use of mobile banking to the transparency of fees and interest rates, and opening hours and accessibility of bank branches.

Overall ratings ranged from 74.2 to 93.6, and 133 unique banks and 171 unique credit unions qualified for the state’s top accolades, representing just 2.7% of all U.S. banks. and 3.4% of all credit unions.

A trio of large regional banks—Fifth Third Bank
FITB
Huntington and Synovus
SNV
Bank – received Best-In-State awards in four different states, while Citizens Bank and M&T Bank
MTB
won the honors in three. Among the best of two states are 10 banks: BancorpSouth
BXS
capital one
COF
City National Bank, First National Bank of Omaha, Gate City Bank, Great Southern Bank, SouthState Bank, Washington Trust Bank, Webster Bank
WBS
and WesBanco
WSBC
.

A handful of elite banks from five different states earned the highest scores from their customers: BankRI of Rhode Island (91.41), DL Evans Bank (90.86) in Idaho, Tri City National Bank of Wisconsin (90.37), Community National Bank of Vermont (90.14) based in Derby and New Peoples Bank (90.01) in Honaker, Va.

Click here to see full coverage of the top US banks in every state.

Credit unions have long offered their members who had money to lend a way to put it to work by providing credit to members looking to take out a loan. Their nonprofit model grew across the United States during the 20th century when groups of employees from large corporations, school boards, local governments, and the military came together to volunteer competitive interest rates on savings and loans on reasonable terms. Today, there are more than 5,000 credit unions nationwide in cities and towns large and small.

Besides basic savings and checking accounts, credit unions are where millions of Americans turn when they need a mortgage to buy a home, a loan to buy a vehicle or capital to finance their business. Now that the Federal Reserve is raising interest rates to fight inflation, that could mean slower demand for loans, although the rate hike will prompt many members to increase their savings. Keeping customers for life will remain the name of the game for the best credit unions.

Click here to see full coverage of America’s top credit unions in every state.

As the functions of credit unions and banks increasingly fade in the eyes of consumers, mergers and acquisitions have been active, with purchases going back and forth between banks and credit unions. In fast-growing states like Florida and Texas, where population flows have propelled home and auto loan volumes, credit unions are often bigger acquirers than banks.

The data suggests the expansion didn’t come at a cost to customer satisfaction among the 543 employees at Tampa-based Grow Financial (91.06), which earned the Sunshine State’s highest overall score. Other Florida credit unions that earned Best-In-State honors include Pen Air Federal of Pensacola (89.71), Community First of Jacksonville (88.07) and VyStar (87.30) and Suncoast Credit Tampa-based Union (86.75).

Oklahoma City-based WEOKIE earns top five scores nationally in 2022
KIE
Federal Credit Union (93.64), Northwest Community Credit Union based in Eugene, Oregon (92.96), UniWyo Credit Union based in Laramie, Wyo (92.53), CoVantage Credit Union based in Antigo, Wis. (92.32) and STCU (92.07) from Liberty Lake, Wash.

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