Despite record year, Georgetown bank downgraded

Despite record year, Georgetown bank downgraded

First National Bank in Georgetown was the only area bank downgraded two notches in the latest ratings from the BauerFinancial bank-rating service.

The Georgetown bank's rating fell from 4-star ("excellent") to 3-star ("adequate"), skipping over the 3-1/2-star ("good") rating, based on data for the quarter that ended June 30.

Bank President Jeffrey A. Tate said the bank is enjoying a record year in earnings, loan growth and deposit growth.

He said BauerFinancial downgraded the bank based on one of its capital ratios. The total risk-based capital ratio on June 30 was 9.8 percent — just under the 10 percent ratio that BauerFinancial requires for banks rated higher than 3 stars.

As a result, BauerFinancial considers the bank "adequately capitalized" rather than "well capitalized," he said.

The bank's chairman, Perry Albin, released a statement that "the Bauer grading system apparently recognizes that there is a higher risk factor in making loans rather than investing in government bonds or holding cash."

Albin added the bank "is having the best year in its history and has experienced no significant loan quality (problems) or other problems."

The bank, which has about $41 million in assets, is owned by Longview Capital Corp.

That holding company also owns the Longview State Bank and the State Bank of Chrisman (both rated 3-star); Bank of Gibson City (rated 3 1/2-star); and First National Bank of Ogden (rated 4-star).

Aside from the Georgetown bank, the only other bank in East Central Illinois that was downgraded was Kenney Bank & Trust, which fell from 4-star to 3 1/2-star.

The Kenney bank was rated 4-star when figures for the first quarter of 2011 were released, but the rating was later revised to 3 1/2-star.

Three banks received upgrades:

— Bank of Rantoul and Hardware State Bank in Lovington both got 5-star ("superior") ratings, up from 4-star for the March 31 quarter.

— MainSource Bank's rating climbed from 3-star to 3 1/2-star. The Indiana-based bank has offices in Hoopeston, Potomac and Watseka, among other places.

The other 74 banks in East Central Illinois maintained the same ratings as the previous quarter.

More than half of those banks — 40 — received 5-star ("superior") ratings, the highest level that BauerFinancial awards.

Centrue Bank continued to be rated zero-star, BauerFinancial's lowest rating.

Centrue, based in Streator, has agreed to sell its Champaign office to Springfield-based Marine Bank, pending regulatory approval, in order to concentrate on markets in north central Illinois and the St. Louis area.

Champaign-based CIBM Bank continued to receive a 2-star ("problematic") rating. The bank, known as Central Illinois Bank locally, has 10 locations in central Illinois, three in Wisconsin and one in Indianapolis.

BauerFinancial bases its ratings on capital ratios, profitability trends, levels of delinquent loans, charge-offs and repossessed assets, liquidity, historical data and supervisory actions by regulatory agencies.

BauerFinancial is one of several bank-rating services. It differentiates itself from others by making its ratings widely accessible to the public.

Here's the breakdown of ratings on 79 banks with offices in East Central Illinois by BauerFinancial, based on data from the quarter that ended June 30, 2011:

5-star ("superior") ratings

40 banks

Bank of Rantoul; Buckley State Bank; Cissna Park State Bank; Commerce Bank, N.A.; Community Bank of Hoopeston; DeWitt Savings Bank, Clinton; Farmer City State Bank; Farmers State Bank, Danforth; First Bank & Trust Savings Bank, Paris; First Federal Savings Bank of Champaign-Urbana; First Federal Savings & Loan, Mattoon; First Financial Bank of Terre Haute, Ind.; First National Bank & Trust, Clinton; The First National Bank, Mattoon; First National Bank in Paxton; First National Bank of Arcola; First National Bank of Chrisman; First National Bank of Ivesdale; First National Bank of Nokomis; First Neighbor Bank, Toledo; First Savings Bank, Danville; First State Bank, Monticello; First Trust and Savings Bank, Watseka; Hardware State Bank, Lovington; Heartland Bank & Trust, Bloomington; Hickory Point Bank & Trust; Iroquois Farmers State Bank; Iroquois Federal Savings and Loan; Philo Exchange Bank; Prairie State Bank & Trust; Scott State Bank, Bethany; Sidell State Bank; Soy Capital Bank & Trust, Decatur; State Bank of Arthur; State Bank of Bement; State Bank of Cerro Gordo; Sumner National Bank, Sheldon; Tuscola National Bank; Vermilion Valley Bank, Piper City; Villa Grove State Bank.

4-star ("excellent") ratings

15 banks

BankChampaign; Citizens State Bank, Milford; Edgar County Bank & Trust; Farmers-Merchants National Bank, Paxton; First Mid-Illinois Bank & Trust; First National Bank of Ogden; First National Bank of Sullivan; Freestar Bank; Gifford State Bank; Midland States Bank, Effingham; Milford Building & Loan; Old National Bank; Peoples Bank & Trust, Pana; State Bank of Lincoln; Woodforest National Bank.

3- 1/2-star ("good") ratings

15 banks

Bank of Gibson City; Busey Bank; Dewey Bank; First Midwest Bank; First National Bank of Catlin; Flanagan State Bank; Illinois National Bank, Springfield; JP MorganChase Bank; Kenney Bank & Trust; MainSource Bank; Marine Bank, Springfield; PNC Bank; State Bank of Chrisman; State Farm Bank; United Community Bank, Oakwood.

3-star ("adequate") ratings

Seven banks

Bank of America; Citizens National Bank, Paris; Federated Bank, Onarga; First National Bank in Georgetown; Fisher National Bank; Longview State Bank, Sidney; Regions Bank.

2-star ("problematic") ratings

One bank

CIBM Bank (Central Illinois Bank).

1-star ("troubled") ratings

No banks

Zero-star ("lowest") ratings

One bank

Centrue Bank.