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Despite zero-star rating Oxford Bank was profitable

January 05, 2011 - Once again, Oxford Bank earned the lowest possible rating from a leading banking research firm.

The community bank received a zero-star rating from the Florida-based BauerFinancial, Inc. for the third quarter that ended Sept. 30, 2010.

Founded in 1884, the local financial institution was one of eight banks in southeast Michigan and 12 banks statewide that received zero stars out of a possible five.

This is Oxford Bank's eighth consecutive zero-star quarterly rating from BauerFinancial since Dec. 31, 2008.

In a written statement, Oxford Bank President and CEO C. James Bess indicated the rating doesn't show folks the whole picture.

"What the Bauer information does not tell you is that Oxford Bank was profitable for three of the last four months of 2010 and booked a solid profit for the fourth quarter of 2010," he said. "The Bank is experiencing fewer loan losses, less severity in loan losses, and the general condition of our borrowers appears to be gradually improving. We expect 2011 financial results to outperform 2010."

Bess explained that because the BauerFinancial rating is based on a financial institution's Sept. 30, 2010 call report, "the information is outdated before it is published."

He said the rating "doesn't reflect recent changes to a financial institution's current performance, good or bad."

"Furthermore, the scope of their analysis is limited since they do not include qualitative factors such as market conditions, economic trends and management structure," Bess said.

For their ratings of banks and credit unions, BauerFinancial evaluates capital-to-debt ratios, profit and loss trends, delinquent loans and write-offs, historical data, liquidity, reserves, repossessed assets, community reinvestment rating, market versus book value of the investment portfolio and regulatory supervisory agreements.

Editor C.J. Carnacchio

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