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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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  • Real Estate Loans Take Three Banks Down-- Two In Florida, One In Kentucky 0 comments
    Apr 23, 2013 12:08 PM

    The two branches of Heritage Bank of North Florida, Orange Park, Florida were closed with FirstAtlantic Bank, Jacksonville, Florida, to assume all of the deposits.

    Founded May 23, 1986, the bank had 25 full time employees at their offices in Orange Park and Ponte Vedra. In 2009 the bank had 34 full time employees.

    The banks last profitable year was 2007:

    (in millions, unless otherwise)

    Profit
    2006 $2.4
    2007 $1.7
    2008 -$1.5
    2009 -$2.7
    2010 -$9.2
    2011 -$1.3
    2012 -$1.9

    Net Equity

    2006 $15.4
    2007 $18.6
    2008 $16.7
    2009 $14.0
    2010 $5.1
    2011 $4.2
    2012 $2.2

    Non-Current Loans
    2006 $129,000
    2007 $4.6
    2008 $10.4
    2009 $15.0
    2010 $14.0
    2011 $13.9
    2012 $20.0


    Heritage Bank, Orange Park

    In 1986, Heritage Bank of North Florida opened its first bank in Orange Park, Florida under the name of Clay County Bank. The bank applied for, and received, permission in April 2000 from banking regulators to change its name to Heritage Bank of North Florida.

    Heritage Bank, Ponte Verde

    In February 2002, the Ponte Vedra Beach office was opened.


    Randolph L. "Randy" Knepper was president since 2005

    In 2008 the bank experiencing its first rough year, realizing it would not only be unprofitable but non-current loans were going to jump over $10 million attempted a merger with Jacksonville Bank. It did not happen.

    August 4, 2009 the FDIC issued a Cease and Desist notice:
    http://www.leasingnews.org/PDF/August4CeaseDesist2013.pdf

    December 9, 2009 an FDIC written agreement, but it basically was too late: http://www.leasingnews.org/PDF/December92009FDICWrittenagreement.pdf

    This is perhaps the most evident showing how real estate construction fell, which also affect employment and drop in retail business:

    Single-family new house construction building permits:

    1997: 59 buildings, average cost: $99,600
    1998: 51 buildings, average cost: $101,700
    1999: 83 buildings, average cost: $81,900
    2000: 29 buildings, average cost: $128,700
    2001: 17 buildings, average cost: $132,600
    2002: 8 buildings, average cost: $161,800
    2003: 11 buildings, average cost: $400,000
    2004: 10 buildings, average cost: $121,300
    2005: 10 buildings, average cost: $168,100
    2006: 6 buildings, average cost: $147,200
    2007: 7 buildings, average cost: $131,400
    2008: 4 buildings, average cost: $126,000
    2009: 0 buildings
    2010: 0 buildings
    2011: 3 buildings, average cost: $181,700
    www.city-data.com/city/Orange-Park-Florida.html

    (click to enlarge)

    1,347 Foreclosed homes Orange Park Real Estate
    www.zillow.com/orange-park-fl/
    aerial photos
    www.homes.com/Real_Estate/FL/City/
    ORANGE%20PARK/TypeFORECLOSURE/

    Homes.com foreclosed homes Orange Park
    www.homes.com/Real_Estate/FL/City/ORANGE.../

    Charge Offs
    2006 $26,000 ( $28,000 consumer loans, -$2,000 commercial/industrial)
    2007 $80,000 ($69,000 1-4 family homes, $11,000 consumer loans)
    2008 $3.0 ($1.5 construction/land, $879,000 nonfarm/nonres.,$388,000 multi-family, $11,000 commercial/industrial, -$3,000 consumer loans)
    2009 $4.5 ($2.4 nonfarm/nores.,$784,000 1-4 family,$725,000 construct/land, $410,000 multifamily, $119,000 commercial/Ind. $25,000 consumrt0.
    2010 $943,000 ( $562,000 nonfarm/nonres.,$402,000 1-4 family res.,$21,000 consumer, -$21,000 commercial/industrial)
    2011 $1.9 ($685,000 nonfarm/nonres.,$540,000 1-4 family, $447,000 construction/ land, $195,000 commercial/ind.,$74,000 multi, -$4,000 indiv.)
    2012- $2.7 ($1.1 nonfarm/nonres.,,$710,000 multifamily,$637,000 1-4 family,$282,000 commercial/industrial, $4,000 individuals.

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

    Tier 1 risk-based capital ratio 2.23%

    As of December 31, 2012, Heritage Bank of North Florida had approximately $110.9 million in total assets and $108.5 million in total deposits. In addition to assuming all of the deposits of the failed bank, FirstAtlantic Bank agreed to purchase essentially all of the assets.

    The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $30.2 million
    www.fdic.gov/news/news/press/2013/pr13029.html

    Chipola Community Bank, Marianna, Florida, was closed with First Federal Bank of Florida, Lake City, Florida, to assume all of the deposits. Founded October 31, 2005, the bank had ten full time employees at the end of December 31, 2012.

    "Marianna is an official Florida Main Street town. The downtown area has been restored to look as it did many years ago. The downtown area includes the Marianna Historic District, with a number of antebellum homes."
    en.wikipedia.org/wiki/Marianna,_Florida

    The bank never made a profit since its opening:

    (in millions, unless otherwise)

    Profit
    2005 -$400,000
    2006 -$405,000
    2007 -$235,000
    2008 -$213,000
    2009 -$3.5
    2010 -$2.1
    2011 -$977,000
    2012 -$624,000
    3/31 -$239,000

    Net Equity
    2005 $7.6
    2006 $7.3
    2007 $7.1
    2008 $7.1
    2009 $4.3
    2010 $2.0
    2011 $1.4
    2012 $530,000
    3/32 $286,000

    Non-Current Loans
    2005 0
    2006 0
    2007 $1.5
    2008 0
    2009 $3.6
    2010 $2.9
    2011 $1.2
    2012 $1.4

    Charge Offs
    2005 0
    2006 0
    2007 0
    2008 0
    2009 $2.3 ($1.8 construction/land,$465,000 1-4 family residential)
    2010 $770,000 ( $633,000 farmland,$61,000 nonfarm/nonres.,$26,000 construction, $24,000 1-4 family, $23,000 commercial/industrial)
    2011 $566,000 ($360,000 nonfarm/nonres.,$175,000 farmland,$3,000
    $3,000 individual, -6,000 construction/land)
    2012 $62,000 ($32,000 construction/land,$28,000 1-4 family, $2,000 indiv.)
    3/32/13 $98,000 ($98,000 nonfarm/nonresidential)

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

    Tier 1 risk-based capital ratio .015534

    As of December 31, 2012, Chipola Community Bank had approximately $39.2 million in total assets and $37.6 million in total deposits. In addition to assuming all of the deposits of the failed bank, First Federal Bank of Florida agreed to purchase essentially all of the assets.

    The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $10.3 million.
    www.fdic.gov/news/news/press/2013/pr13030.html

    The five branches of First Federal Bank, Lexington, Kentucky, were closed with Your Community Bank, New Albany, Indiana, to assume all of the deposits. Founded December 26, 1935, the bank had 28 full time employees at their four offices in Lexington and one office in Georgetown. Year-end 2008 the bank had 53 full time employees'

    Lexington city view photo

    April 9, 2010 Supervisory agreement with the Southeast Region of the Office of Thrift Supervision:
    http://www.leasingnews.org/PDF/FirstFederalApril92010OTS.pdf

    First Federal Bank signed a Consent Order with the Comptroller of the Currency in November 2011 under which the Bank was ordered to increase capital and was cited for a wide range of financial and managerial deficiencies.

    William H. McCann, 84, attorney, of counsel with law firm Wyatt Tarrant & Combs LLP, was chairman of First Federal Bank.

    The bank was not profitable and in 2010 the housing market and construction industry hit the fan, along with a number of badly made loans. The construction scene is best view with these statistics:

    Single-family new house construction building permits:
    1997: 1636 buildings, average cost: $96,000
    1998: 1868 buildings, average cost: $104,800
    1999: 1784 buildings, average cost: $106,500
    2000: 1898 buildings, average cost: $111,500
    2001: 1649 buildings, average cost: $111,300
    2002: 2142 buildings, average cost: $110,900
    2003: 2206 buildings, average cost: $126,900
    2004: 2184 buildings, average cost: $129,300
    2005: 2399 buildings, average cost: $125,500
    2006: 1521 buildings, average cost: $147,400
    2007: 1227 buildings, average cost: $157,100
    2008: 771 buildings, average cost: $167,600
    2009: 770 buildings, average cost: $121,700
    2010: 628 buildings, average cost: $127,800
    2011: 513 buildings, average cost: $135,700
    www.city-data.com/city/Lexington-Fayette....html

    Tier 1 risk-based capital ratio 1.82% December 31, 2012

    (in millions, unless otherwise)

    Net Equity
    2006 $25.1
    2007 $24.6
    2008 $23.5
    2009 $22.5
    2010 $15.8
    2011 $9.3
    2012 $1.3

    Profit
    2006 -$76,000
    2007 -$56,000
    2008 -$784,000
    2009 -$964,000
    2010 -$6.6
    2011 -$6.5
    2012 -$8.0

    Non-Current Loans
    2006 $324,000
    2007 $1.8
    2008 $3.1
    2009 $9.2
    2010 $4.4
    2011 $9.4
    2012 $11.7

    Charge Offs
    2006 $25,000 ( $23,000 multi-family homes, $2,000 consumers)
    2007 -$37,000 ( $22,000 individuals, -$59,000 construction/land,-$2,000
    multifamily)
    2008 $70,000 ( $34,000 construction/land,$$26,000 commercial/ind.,$10,000
    individuals, -$18,000 multi-family homes)
    2009 $182,000 ( $161,000 multi-family homes, $9,000 individual, $9,000 farmland), $3,000 commercial/industrial non-US addresses)
    2010 $4.2 ( $2.1 nonfarm/nonresidential, $1.8 multi-family, $124,000 commercial/industrial non-US address, $62,000 multifamily, $8,000 loans to foreign government and official institutions)
    2011 $466,000 ( $428,000 nonfarm/nonres.,$27,000 1-4 family homes, $6,000
    commercial/industrial non-US addresses, $5,000 individuals)
    2012 $1.& ($808,000 nonfarm/nonresidential,$666,000 multifamily, $243,000 1-4 family homes, $12,000 credit cards, $6,000 commercial/industrial to Non-Us addresses,

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

    As of December 31, 2012, First Federal Bank had approximately $100.1 million in total assets and $93.9 million in total deposits. In addition to assuming all of the deposits of the failed bank, Your Community Bank agreed to purchase essentially all of the assets.

    The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $9.7 million.
    www.fdic.gov/news/news/press/2013/pr13028.html

    Bank Failure Map:
    http://leasingnews.org/archives/Mar2013/3_28.htm#failed

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

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

    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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