West Michigan banks score as "troubled or problematic"

WEST MICHIGAN (NEWSCHANNEL 3) - As customers of the failed bank IndyMac are pushing to get their money back, several West Michigan banks turn out to be troubled.

Federal regulators seized IndyMac ten days ago. The bank crumbled under pressures of tighter credit, tumbling home prices and rising foreclosures.

Treasury secretary Henry Paulson predicted that IndyMac won't be the last bank to go under.

There are a number of organizations out there that rank banks and credit unions, such as Bauer Financial, which finds that several West Michigan banks are troubled.

Bauer Financial ranks on a star system, zero being the worst, five being the best.

The independent agency analyzes all U.S. banks and credit unions, basing their ratings on criteria such as credit quality, loan delinquency ratios, and profitability.

Four West Michigan banks and three credit unions rank two stars or lower, putting them into Bauer Financial's "troubled or problematic" categories.

Newschannel 3 discovered that here in West Michigan; Select Bank in Grand Rapids ranked two stars as 'problematic' as did Muskegon Commerce Bank, Main Street Savings in Hastings and Grand Haven Bank.

When it came to Credit Unions; Rockford Community and Kalamazoo's Citizens Credit Union also ranked two stars. Access First of Mattawan ranked just one star, which according to Bauer Financial means 'troubled.'

But experts say consumers don't need to rush to switch banks.

"I wouldn't concern yourself too much with the star ratings, as a consumer I'd be more concerned about if my levels of deposits are higher than the insurance that I have," said Brent Kerstetters of Sanford Financial Services.

FDIC insurance covers up to $100,000 per depositor per bank.

For example, if you are married, and you and your spouse share an account at the same bank, the two of you would be insured up to $200,000 for the single account.

A number of banks contacted by Newschannel 3 did not return calls, but an executive from Access First of Mattawan says that Access First currently has their lowest loan delinquency percentage since 2003 and that the poor ratings are based on past management decisions. 

New management was put in place last year.