A local bank has worked its way out of the cellar of state bank ratings, while another took a step back.
Village Bank improved its standing in the fourth quarter, according to ratings released last week, after being among the lowest rated banks in the state for several periods.
The Midlothian-based bank received a one-star “troubled” rating in the final three months of the year from Bauer Financial, a Coral Gables, Fla., firm that each quarter rates all federally insured financial institutions. That’s from up from consecutive quarters with a zero rating, the lowest Bauer gives out.
Bauer’s ratings are based on financial information such as capital levels, profits and nonperforming assets. The agency uses a five-star ranking system.
Village’s climb follows a profitable fourth quarter, its first quarter in the black since 2011.
Further west in Powhatan, Central Virginia Bank fell in the ratings from a two-star “problematic” rating to one star.
That follows a $328,000 loss in the fourth quarter and a decline in its annual profit during 2012.
At the other end of the ratings spectrum, Xenith Bank and Bank of Southside Virginia were the only two local banks to receive a five-star “superior” rating, Bauer’s highest.
Xenith Bank, which has been in business since late 2009, has grown quickly to $563 million in assets through acquisition, including buying the remains of the failed Virginia Business Bank. It turned a $7.3 million profit in 2012.
Bank of Southside has routinely scored a five-star rating. It reported an $8.1 million profit in 2012 and $549 million in total assets.
Union First Market Bank, C&F Bank, Bank of McKenney and New Horizon Bank all held steady with four-star “excellent” ratings.
Essex Bank improved from a three-star “adequate” rating to 3½ stars after a profitable year and getting current on its TARP payments.
First Capital Bank, Virginia Community Bank, Virginia Commonwealth Bank and EVB all remained at three stars. Bank of Virginia held firm at two stars.
Bauer also rates all federally-insured credit unions, of which there are more than 32 in the Richmond area.
Of those, 11 received five-star ratings for their fourth quarter performance. They include Argent Federal Credit Union, Hopewell Chemical FCU, Petersburg FCU, Vantage Point FCU, Fort Lee FCU, Call FCU, Dominion Credit Union, Nabisco Employees CU, New Generations FCU, RF&P Richmond FCU, and Resources FCU.
Sixteen local credit unions received four-star ratings from Bauer.
Richmond-based Life Line Credit Union remained the only credit union in the state with a zero-star rating. It has been at that level for at least two years.