Bank of Maumee, Monroe Bank & Trust rebound in 4Q

Institutions showed significant improvement in ratings report

3/18/2014

Two area banks that had struggled the last few years with their financial performance righted their ships in the fourth quarter of 2013, and as a result showed significant improvement in the new banking and credit union reports by BauerFinancial Inc.

Bank of Maumee, which had been rated at zero stars, the lowest possible rating by BauerFinancial, received a two-star “problematic” rating for the quarter that ended Dec. 31.

BauerFinancial, a leading bank research firm located in Coral Gables, Fla., rates banks and credit unions from zero to five stars each quarter based on the institution’s financial profile.

Meanwhile, Monroe Bank & Trust, which is owned by MBT Financial Corp., received a three-star “adequate” rating for the fourth quarter. The Monroe bank had been stuck at a two-star “problematic” rating for nearly three years running because of problems with its nonperforming loan portfolio, which ballooned six years ago because of the 2007 housing crash.

The bank had invested heavily in mortgages to fuel residential growth in the Monroe area.

But last year it reduced its loan portfolio and provisions for loan losses and posted a profit of nearly $24 million over the first nine months of 2013. In October it took a big step by conducting a stock offering totaling $20 million to infuse the bank with new capital.

Bank of Maumee also boosted its capital reserves in the fourth quarter by selling a majority stake in the bank to Princeton Capital LLC, a bank holding company. The new owner infused the bank with new funds and freed it from its previous owner, Capitol Bancorp Ltd. of Lansing, a troubled bank saddled with bad loans.

“Two stars? That’s not bad for a month and a half. We just closed in November” on the Princeton Capital deal, said Kevin Rahe, Bank of Maumee president.

“We’re focused now on getting earnings back to where they need to be. We’ve got the capital, now we just need the earnings,” Mr. Rahe said.

Bank of Maumee recently sold several small business administration loans, which is expected to help it be more profitable in the first quarter.

“By the end of the quarter we will be well capitalized and our earnings will be up. As the year goes along we expect more improvement,” he said.

“It’s great to be away from Capitol Bank and the problems they had. We’re back to new life and doing good business again,” Mr. Rahe said.

One other institution in northwest Ohio, Union Bank Co. of Columbus Grove, raised its rating to a four-star “excellent” from a 3½-star “good” rating.

Four institutions saw their ratings decrease:

● The Henry County Bank in Napoleon saw its rating drop from five-star “superior” to four stars.

● Focus Federal Credit Union of Toledo went from five stars to four stars.

● Sun Federal Credit Union of Maumee went from four stars to three stars.

● United Services Federal Credit Union in Toledo dropped to four stars from five stars.

The ratings of 49 credit unions and 24 banks in northwest Ohio and two banks and three credit unions in southeast Michigan remained unchanged.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.