Commerce Bank of Arizona, which has five branch offices in Southern Arizona and two in the Phoenix area, retained its five-star or "superior" rating.
Bauer, a Florida-based firm, rates financial institutions on a scale from zero to five stars using quarterly reports filed with the Federal Deposit Insurance Corp. The firm examines ratios of capital to risk-weighted assets, along with other factors.
Randy Yenerich, Commerce Bank's president and CEO, said Southern Arizona banks, which made fewer risky land development loans, have weathered the recession better than community banks in Phoenix and other areas.
Commerce Bank had $275 million in assets and a quarterly income of $50,000, with 6.8 percent of its assets nonperforming, the data from Bauer showed.
Nonperforming assets include delinquent loans and repossessed real estate.
Yenerich said the bank's first-quarter income reflects costs incurred from opening an office in Scottsdale, while its nonperforming assets largely come from its purchase of Mesa's Towne Bank from the FDIC last year.
Commerce Bank, which deals primarily with small-business loans, has seen its portfolio decrease over the last year.
"We've had $30 million in loans paid off, without the ability to replace those as you would in a regular economy," Yenerich said.
Business owners remain uncertain about how the economy will pan out and are holding off on taking out additional loans, he said, adding that he doesn't see the situation turning around anytime soon.