Seeking Alpha

Christopher Menkin's  Instablog

Christopher Menkin
Send Message
Christopher "Kit" Menkin is of editor LeasingNews.org (http://www.leasingnews.org/), an internet trade publication for the finance/leasing industry. He has 41 years experience in the finance/leasing industry as well as being a founder of a commercial regional bank and serving on... More
My company:
Leasing News
  • No One Wants Nova Bank! 0 comments
    Oct 29, 2012 12:11 PM

    Bank Beat by Christopher Menkin

    The 13 branches of NOVA Bank, Berwyn, Pennsylvania, were closed today by the Pennsylvania Department of Banking and Securities, which appointed the FDIC as receiver. The FDIC was unable to find another financial institution to take over the banking operations of NOVA Bank. The FDIC will mail checks directly to depositors of NOVA Bank for the amount of their insured money. As a convenience to depositors, the FDIC has made arrangements with National Penn Bank to accept the failed bank's direct deposits from the federal government, such as Social Security and Veterans' payments through January 25, 2013. (The seven National Penn Bank locations designated to service NOVA Bank's customers receiving federal government direct deposit payments are as follows: One Penn Center; East Falls; Norristown; Wynnewood; Paoli; Wayne, and Lionville.)

    The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $91.2 million

    The Bank was established May 31, 1887 and had 107 full time employees at 13 offices: two in Berwyn (1887 & 1999), one in Deptford (1988), Exton (2005), Havertown (2004), Media (2006), Plymouth Meeting (1998), Woodbury Heights (1998), Wynnewood (1999) and four in Philadelphia (1997, two 2008, 2004/2009). Filed January 11, 1988 and notice on November 29, 2008

    NOVA Financial Holdings acquired 100% of Pennsylvania Business Bank and merged with Embassy Bank with William Kronenberg, III, Kenneth B. and Moira F. Mumma, Lawrence Way each 16.7% of preferred stock and John J. and Doris Sickely 13.3% of preferred stock of New Century Bank, Phoenixville.
    http://www.pabulletin.com/secure/data/vol38/38-48/2153.html
    (Kronenberg was involved in insurance, Mumma, an attorney, was the chairman and CEO of New Century Bank).

    The FDIC gave Chief Lending Officer Thomas J. Patterson notice of participation with the bank January 26, 2012 (Meaning they didn't want him having any authority at the bank).
    http://www.fdic.gov/bank/individual/enforcement/2012-01-15.pdf

    Patterson was arrested for misappropriating customer funds after a joint investigation by the FBI and local police. He later pled guilty and the FDIC issued an Order of Prohibition, barring Patterson from participating in the financial affairs of any institution.

    According to FDIC records, the bank was never profitable, not doing well as early as 2006 before the merger/acquisition and went from the capital of $31.3 million in 2007 to the latest available, $3.7 million, June 31, 2012.

    Charge offs, declining working capital were not good, never getting better, and the non-current loans were enough to scare away any bank from taking over whatever was left, including the branches and 107 full time employees.

    Tier 1 risk-based capital ratio 2.04%

    (in millions, unless otherwise)

    Net Equity

    2006 $28.8
    2007 $31.3
    2008 $25.3
    2009 $23.0
    2010 $13.2
    2011 $9.0
    6/30 $3.7

    Profit

    2006 $194,000
    2007 -$293,000
    2008 -$4.7
    2009 -$25.7
    2010 -$19.0
    2011 -$5.5
    3/31 -$5.0

    Non-Current Loans

    2006 $2.0
    2007 $775,000
    2008 $4.7
    2009 $15.0
    2010 $21.2
    2011 $20.0
    6/30 $27.9

    Charge Offs
    2006 -$22,000 ($51,000 loans to indiv.,-$52,000 commercial/ind.,-$18,000 nonfarm,-$3,000 1-4 family)
    2007 -$115,000 ($136,000 nonfarm/nonres.,$19,000 other loans, $5,000 individuals, -$32,000 commercial/ind., -$13,000 multifamily
    2008 $1.6 ($1,000 multifamily,$477,000 nonfarm, $13,000 other, -$18,000 nonfarm/nonres.)
    2009 $5.3 ($2.1 commercial/industrial,$1.6 1-4 family, $950,000 construction/land,$70,000 other)
    2010 $14.3 ($8.5 commercial/ind.,$3.0 nonfarm/nonres,$1.8 1-4 family,$411,000 construction)
    2011 $6.0 ($3.8 commercial/ind.,$1.3 1-4 family,$1.3 construction/land,-$405,000 nonfarm/nonres.
    6/30 $7.6 ($4.6 commercial/ind.,$1.2 1-4 family,$760,000 nonfarm/nonres. $621,000 construct/land) Construction and Land, 1-4 family multiple residential, Multiple Family Residential, Non-Farm Non-Residential loans

    As of June 30, 2012, NOVA Bank had approximately $483.0 million in total assets and $432.2 million in total deposits. The amount of uninsured deposits will be determined once the FDIC obtains additional information from those customers.

    The FDIC as receiver will retain all the assets from NOVA Bank for later disposition. Loan customers should continue to make their payments as usual.

    http://www.fdic.gov/news/news/press/2012/pr12123.html

    List of Bank Failures:
    http://www.fdic.gov/bank/individual/failed/banklist.html

    Bank Beat:
    http://www.leasingnews.org/Conscious-Top%20Stories/Bank_Beat.htm

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Back To Christopher Menkin's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.