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Christopher Menkin
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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
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  • Another Florida And Another Ilinois Bank Fair 0 comments
    Nov 5, 2012 1:49 PM

    The three branches of Heritage Bank of Florida, Lutz, Florida, were closed with Centennial Bank, Conway, Arkansas, to assume all of the deposits. Founded August 3, 1999, the bank had 38 full time employees as of June 30, 2012 at their two offices in Wesly Chapel and one office in Lutz and Tampa.

    Tier 1 Risk Capital: .728% (Yes, that is correct. editor)

    Clark G. Hobby, son, H. Clyde Hobby, father
    http://hobbylaw.com/

    H. Clyde Hobby, P.A., was chairman of the bank and also president of Florida Governmental Consultants and partner in law firm Hobby and Hobby PA, New Port Richey, Florida.

    "Mr. Hobby has served on several boards of directors for Florida banking corporations and as their general counsel. In connection with these projects and clients, he is experienced in Florida and Federal banking law and regulation, reviewing and advising clients regarding various types of instruments and loan documents..."
    http://hobbylaw.com/bios.html

    What is known as the TFR Report, which is the consolidated reports of Condition and Income FFIEC 041 are most revealing. They are the information before the final report. The Heritage Bank of Florida September 30 shows the high 1-4 family loan losses are more in "junior liens" than "1st" ($606,000 to $1.0) as well as the nonfarm/nonresidential loan losses are more in non-owner occupied properties ($172,000 to $756,000), as well as most individual loans are automobile losses followed by credit cards (here it is all automobile loans)

    It is obvious that residential mortgages took this bank down with the highest write-offs, more than construction/land, as well as commercial/industrial and nonfarm nonresidential (basically again real estate rentals) were significant to bring a bank from a $24.6 million equity in 2009 to $1.2million the end of this September.

    As significant the Non-Current Loans were very high, resulting in further loss in profit.

    (in millions, unless otherwise)

    Net Equity
    2006 $20.0
    2007 $22.2
    2008 $23.5
    2009 $24.6
    2010 $17.1
    2011 $8.7
    9/30 $1.2

    Profit
    2006 $2.6
    2007 $2.5
    2008 $2.1
    2009 $713,000
    2010 -$7.4
    2011 -$4.7
    9/30 -$7.5

    Non-Current Loans
    2006 $25,000
    2007 $318,000
    2008 $3.6
    2009 $4.7
    2010 $15.7
    2011 $13.5
    6/30 $7.7

    Charge Offs
    2006 $16,000 ( $16,000 loans to individuals)
    2007 $298,000 ($232,000 commercial/industrial, $36,000 individuals, $30,000 1-4 family)
    2008 $581,000 ($266,000 1-4 family, $192, construction/land, $97,000 commercial, $26,000 indiv.)
    2009 $1.4 ($651,000 1-4 family, $561,000 commercial/Ind., $178,000 nonfarm/nonres., $12,000 indiv.)
    2010 $8.8 ($5.1 1-4 family, $1.9 commercial/ind.,$1.5 nonfarm/nonres.,$30,000 indiv.)
    2011 $6.1 ($2.8 1-4 family, $2.2 nonfarm/nonres.,$840,000 commercial/res, $144,000 indiv.,$111,000 construction/land)
    9/30 $7.0 ($4.4 commercial/industrial, $1.6 1-4 family, $982,000 nonfarm/nonres., $47,000)

    Construction and Land, 1-4 family multiple residential, Multiple Family Residential, Non-Farm Non-Residential loans.

    As of September 30, 2012, Heritage Bank of Florida had approximately $225.5 million in total assets and $223.3 million in total deposits. In addition to assuming all of the deposits of the failed bank, Centennial Bank agreed to purchase approximately $193.7 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

    The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $65.5 million.

    8th bank in Florida to fail this year.

    http://www.fdic.gov/news/news/press/2012/pr12127.html

    The 20 offices of Citizens First National Bank, Princeton, Illinois, were closed with Heartland Bank and Trust Company, Bloomington, Illinois, to assume all of the deposits. The bank was established January 1, 1865 and made it through three depressions and several recessions. As of June 30, 2012 they had 284 full-time employees at their three offices in Princeton, two in Sandwich, and offices in Aurora, Depue, Geonoa, Hampshire, Henry, Hungly, Millbrook, Minooka, Newark, Oglesby, Peru, Plainfield, Plano, Somonauk, and Spring Valley.

    Note: for the last few years over 300 full time employees with a high of 326 year-end December 31, 2009).

    Tier 1 risk-based capital ratio 3.1%

    The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $45.2 million.

    Mr. Thomas D. Ogaard
    Chief Executive Officer

    "The year 2000 marked the most profitable year in the history of the bank. Assets reached $515,180,000 and a record net income of $8,186,000 was achieved. Total deposits increased in 2001 by $56.4 million. Thomas R. Lasier retired from the board in 2001. Craig O. Wesner was appointed chairman of the board.

    "In 2003, Princeton National Bancorp purchased land in Elburn and Aurora. Construction began on the Aurora facility in 2005.

    Total deposits reached a record high of $537,800,000 in 2003, as did loans with a record high of $383,100,000.

    "In 2005, the company acquired Somonauk FSB Bancorp, which caused the Citizens banking family to grow in the towns of Somonauk, Sandwich, Millbrook, Newark and Plano. Assets at the end of 2005 were nearing a billion dollars. On Oct. 11, 2006, the total assets of Princeton National Bancorp surpassed that $1 billion mark.

    In 2007, the bank grew again with a location in Plainfield.

    Tony J. Sorcic retired from Princeton National Bancorp and Citizens First National Bank on Feb. 1, 2010. Thomas D. Ogaard was appointed president/CEO on Feb. 2, 2010.

    "In the late 2000s, the bank's loan portfolio began suffering major losses, which stressed the bank's capital to critical levels. The loan losses were deep enough to create a severe shortage of capital and resulted in regulatory intervention. The Office of the Comptroller of the Currency filed a formal agreement with the company, demanding it raise its capital to comply with regulatory guidelines.

    "According to the 8-K filing, Princeton National Bancorp, Inc. reported its tangible equity to total assets ratio at the end of its second quarter (ending June 30, 2012) was 1.92 percent. Because of that percentage, the bank became "critically undercapitalized" within the meaning of the bank's ongoing Prompt Corrective Action (PCA) provisions of the Federal Deposit Insurance Act and the regulations of the OCC. At that time, the company was given 90 days to turn its situation around by raising additional capital or merging with another financial institution.

    (Todd D. Fanning, Executive Vice President, Chief Operating Officer, Chief Financial Officer and Director, resigned effective June 15, 2012).

    "In June 20, 2012, Princeton National Bancorp was delisted from the NASDAQ Global Market for not meeting the requirements of the exchange. On June 29, 2012, the stock began trading on the OTCQB Marketplace.

    "Late in the afternoon on Nov. 2, 2012, the Office of the Comptroller of the Currency closed Citizens First National Bank and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver."
    http://www.bcrnews.com/2012/11/02/the-history-of-citizens-first-national-bank/aft5541/?page=1

    (in millions, unless otherwise)

    Net Equity
    2006 $96.7
    2007 $106.1
    2008 $112.1
    2009 $97.4
    2010 $80.1
    2011 $30.2
    9/30 $18.4

    Profit
    2006 $7.7
    2007 $8.3
    2008 $8.7
    2009 -$19.9
    2010 -$16.1
    2011 -$52.3
    9/30 -$4/7

    Non-Current Loans
    2006 $3.9
    2007 $7.4
    2008 $33.0
    2009 $53.5
    2010 $82.9
    2011 $96.9
    6/30 $64.9

    Charge Offs
    2006 $426,000 ( $225,000 commercial/industrial, $162,000 farmland, $16,000 1-4 family), $26,000 indivi.)
    2007 $445,000 ($344,000 commercial/industrial, $97,000 individual, -$15,000 credit cards, -$1,000 farmland)
    2008 $1.1 ($760,000 commercial/ind.,$308,000 individuals, $91,000 1-4 family)
    2009 $4.0 ( $2.5 commercial/ind.,$1.0 individuals, $273,000 1-4 family, $238 nonfarm/nonres.)
    2010 $22.9 ($13.0 construction/land, $4.0 1-4 family, $1.5 commercial,$1.4 nonfarm/nonres., $117,000indiv., $68,000 farmland)
    2011 $51.1 ($21.3 construction/land, $18.2 nonfarm/nonres., $4.9 1-4 family, $3.9 commercial/industrial, $2.2 farmland,$430,000 multifamily, $
    9/30 $23.7 ($15.0 construction/land. $2.6 1-4 family, $2.6 commercial/industrial,$2.4 nonfarm/nonres., $133,000 individual)

    Construction and Land, 1-4 family multiple residential, Multiple Family Residential, Non-Farm Non-Residential loans

    As of September 30, 2012, Citizens First National Bank had approximately $924.0 million in total assets and $869.4 million in total deposits. In addition to assuming all of the deposits of the failed bank, Heartland Bank and Trust Company agreed to purchase essentially all of the assets.

    Heartland Bank and Trust has now acquired a total of 4 failed banks in the last two years; previous three are Western Springs National Bank and Trust, Western Springs, Illinois (April,2011), Bank of Shorewood, Shorewood, Illinois, August, 2012 Bank of Illinois, Normal, Illinois (March, 2010),

    "We're a locally owned community bank whose roots are right here in the heartland. The Drake family, who came to Central Illinois in 1852, has been in banking for over 80 years. With the third generation of the family taking an active role in the banking business, we continue this tradition."

    About Heartland Bank:
    http://www.citizens1st.com/index.asp?page=1169

    http://www.fdic.gov/news/news/press/2012/pr12128.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.

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