Rating services classifies Illinois National Bank as 'problematic'
FAIRMOUNT – A Springfield-based bank that has a branch in the Vermilion County community of Fairmount has received a "2-star" – or "problematic" – rating from BauerFinancial.
Illinois National Bank got the second-lowest rating among 76 banks with a presence in East Central Illinois. It was erroneously omitted from a listing of banks and their ratings that appeared in Sunday's News-Gazette.
The bank, which had $543 million in assets as of June 30 and 12 offices in central Illinois, got the "2-star" rating based on criteria that include capital ratios, profitability trends, liquidity and supervisory actions, among others.
The rating – based on data submitted to regulators for the quarter that ended June 30 – was downgraded from a "3-star" ("adequate") rating given for the quarter that ended March 31.
A call placed to bank President Richard McCord seeking comment was not immediately returned.
Illinois National was profitable in the first two quarters of this year, but it had an abnormally large percentage of assets considered "nonperforming" – the term given to loans and leases on which principal and interest payments are not being met. Often the term refers to commercial loans more than 90 days overdue and consumer loans more than 180 days overdue.
The bank's statistics show 4.69 percent of Illinois National's average tangible assets fell in that category. Most banks in East Central Illinois had less than 2 percent of their assets categorized that way.
Illinois National had a risk-based capital ratio of 10.035 percent as of June 30 – slightly above the 10 percent minimum the Federal Deposit Insurance Corp. requires for "well-capitalized" banks.
Only one other bank had a lower rating than Illinois National – Champaign-based Strategic Capital Bank, which got a rating of "1 star" after federal regulators issued a "cease-and-desist" order against the bank in August. Strategic Capital has been ordered to increase its capital ratios and refrain from increasing its assets.
All other banks in East Central Illinois got ratings of "3 star" or higher. Sixty-one of the banks had either "4-star" ("excellent") or "5-star" ("superior") ratings.
Besides having a branch in Fairmount, Illinois National Bank has another connection to East Central Illinois: One of its directors is Peter B. Fox of Champaign, founder of Fox Development Corp. and manager of Fox/Atkins Development, which oversees the University of Illinois Research Park.
Also on the bank's board is William F. Cellini, a hotel developer well-known for his political contributions to state officials.
The Fairmount bank has been part of Illinois National Bank since 1999. That year, an investor group including former Springfield banker Richard McCord announced plans to acquire Fairmount Bancorp, the holding company for tiny First National Bank of Fairmount. The group said it planned to open a branch in Springfield and change the name to Illinois National Bank.
According to the bank's Web site, Illinois National has grown to have six offices in Springfield as well as offices in Chatham, Riverton, Pleasant Plains, Peoria, Mount Pulaski and Fairmount.
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