Troubled banks in Michigan double

Brian J. O'Connor / Detroit News Finance Editor

The number of significantly "troubled" Michigan-based banks doubled in the first quarter, according to a national bank safety analyst, including New Liberty Bank of Plymouth and Citizens State Bank of New Baltimore.

The ratings firm, BauerFinancial, ranks banks and credit unions from five to zero stars, with five stars representing a "superior" institution and one-star banks classified as "troubled." Five Michigan-based banks had zero stars at the end of 2008, with another five added to the list BauerFinancial released Thursday.

New Liberty dropped from two to zero stars, along with Northpointe Bank of Grand Rapids and Citizens First Savings Bank of Port Huron. Citizens State dropped from one star, along with MainStreet Savings Bank FSB of Hastings. The banks had nonperforming assets of 5.2 percent to more than 12 percent of their tangible assets, according to the report.

Nonperforming assets include loans that are significantly past due and real estate taken back by the bank.

First National Bank in Howell also saw its safety rating decline, from two stars to one.

Four other troubled banks -- Warren Bank, Oxford Bank, Clarkston State Bank and Home Federal Savings Bank of Detroit -- continued with zero-star ratings from the last quarter of 2008.

The safety ratings of several credit unions also fell during the first quarter. Citizens Credit Union of Kalamazoo and Access First FCU of Mattawan dropped from one star to zero. Education First Credit Union of Southgate and Premier Financial Credit Union of Clinton Township fell from two stars to one.

St. Joseph Mercy Hospital Pontiac FCU continued at one-star, while Heartland Employees CU of Edmore and Kerr Employees Credit Union of Romulus continued with zero stars.

Deposits in federally insured banks and credit unions are insured up to $250,000 per depositor at each institution.

The FDIC has seized 37 banks this year, including Michigan Heritage Bank of Farmington Hills.

boconnor@detnews.com (313) 222-2145