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4th And 5th Bank Failure This Year---Pennsylvania And Virginia

The number of banks on the FDIC's "Problem List" declined from 515 to 467 during the quarter. The number of "problem" banks is down by almost half from the recent high of 888 at the end of the first quarter of 2011.

For all of 2013, there were 24 failures, compared to 51 in 2012. The 4th and 5th bank failures of this year perhaps should have been closed last year or maybe even the year before.

The three offices of Millennium Bank, National Association, Sterling, Virginia, were closed with WashingtonFirst Bank, Reston, Virginia, to assume all of the deposits. Founded April 1, 1999, the bank had 23 full time employees at their offices in Herdon and Sterling, and a production unit also in Sterling.

2007, they had 82 full time employees.
2008, 58 full time employees.
2009, 49 full time employees.
2010, 40 full time employees.
2011, 27 full time employees.
2012, 24 full time employees.

Tier 1 risk-based capital ratio -0.78%

In the last eight years, the bank never made a profit:

(in millions, unless otherwise)

Profit
2006 -$164,000
2007 -$9.8
2008 -$16.4
2009 -$12.0
2010 -$6.0
2011 -$5.4
2012 -$2.2
2013 -$4.8

Net equity went from $45.1 million to a minus $3 million.

(in millions, unless otherwise)

Net Equity
2006 $45.1
2007 $36.8
2008 $18.6
2009 $10.5
2010 $3.6
2011 $787,000
2012 -$81,000
2013 -$2.984

Non-Current loans were high as well as charge offs.

Non-Current Loans
2006 $3.4
2007 $23.9
2008 $10.1
2009 $10.3
2010 $6.4
2011 $4.5
2012 $4.4
2013 $2.6

Charge Offs
2006 -$72,000 (-$72,000 construction/land)
2007 $1.6 million ($1.1 million commercial/industrial, $293,000 1-4
family res., $194,000 const./land, $12,000 individual)
2008 $4.8 million ($1.2 million construction/land, $1.1 million
nonfarm/nonres., $931,000 multifamily, $106,000 individual)
2009 $4.4 million ($1.8 million construction/land, $874,000 multifamily, $960,000 commercial/ind., $811,000 nonfarm/nonres., $3,000 individual)
2010 $2.7 million ($1.6 million construction/land, $853,000 1-4 family, $120,000 commercial/inds., $90,000 nonfarm/nonres., $30,000 other loans)
2011 $1.5 million ($1.6 multifamily million, $79,000 construction/land, -$102,000 commercial/ind., $1,000 individual)
2012 $358,000 ($407,000 1-4 family, -$49,000 commercial/ind.
2013 $525,000 ($605,000 commerical/ind., $33,000 multifamily,-$113,000 nonfarm/nonres., -$80,000 construction/land)

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

As of December 31, 2013, Millennium Bank, N.A. had approximately $130.3 million in total assets and $121.7 million in total deposits. WashingtonFirst Bank will pay the FDIC a premium of 1.00 percent to assume all of the deposits of Millennium Bank, N.A. In addition to assuming all of the deposits of the Millennium Bank, N.A., WashingtonFirst Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $7.7 million.

http://www.fdic.gov/news/news/press/2014/pr14016.html

Vantage Point Bank, Horsham, Pennsylvania was closed with First Choice Bank, Mercerville, New Jersey, to assume all of the deposits. Founded December 24, 2007, the bank had 42 full time employees year-end 2013. In 2012, there were 238 full time employees when David Bezar took over as CEO.

Tier 1 risk-based capital ratio : 1.85%

Walter Tilman in April, 2012 left his position as CEO, turning day-to-day operations over to David Bezar, who was the bank's founding president, since it opened in 2007 in Fort Washington.


David Bezar

The Philadelphia Business Journal on April 13, 2012, reported: "Bezar does not have any experience running a bank. Before teaming with Tillman to start Vantage Point in 2007, he spent 18 years running Fort Washington, Pa.-based Wealth Partners, which sells investment products to the mass consumer market. But he said he has learned a great deal over the past five years and completed the graduate program of the Stonier School of Banking at the University of Pennsylvania. And he is hiring new members for the banking team, including a new chief lending officer who he declined to name and is starting later this month.

"The first order of business for Bezar will be to relocate the bank's corporate headquarters and retail branch from Fort Washington to Horsham, Pa. He said Vantage Point was the victim of two floods, including one last August that left the bank without the use of its bottom floor. So it will be relocating the headquarters to an office park at 100 Witmer Drive and the retail branch to 100 Gibraltar Drive - a little more than two miles away from its current location."www.bizjournals.com/philadelphia/blog/je...

It appears the weather not only affected businesses and housing, but also the bank as the loss went from $2.7 million to $3.8 million in 2013 with non-current loans at a high of $1.8 million and bank equity down to $688,000 from a high of $8.5 million in 2007.

Tier 1 risk-based capital ratio at year-end 2013: 1.85%

(in millions, unless otherwise)

Net Equity
2007 $8.5
2008 $5.8
2009 $7.1
2010 $7.6
2011 $7.5
2012 $4.5
2013 $668,000

Profit
2007 -$1.2
2008 -$2.8
2009 $1.2
2010 -$249,000
2011 -$421,000
2012 -$2.7
2013 -$3.8

Non-Current Loans
2007 0
2008 0
2009 $543,000
2010 $945,000
2011 $1.2 million
2012 $585,000
2013 $1.8 Million

Charge Offs
2007 0
2008 0
2009 0
2010 $435,000 ($424,000 commercial/industrial, $11,000 inidividuals)
2011 $28,000 ($30,000 1-4 family, - $2,000 individual)
2012 $630,000 ( $641,000 1-4 family, -$11,000 individual)
2013 $529,000 ($365,000 1-4 family, $97,000 commercial/industrial $67,000 individuals)

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

As of December 31, 2013, Vantage Point Bank had approximately $63.5 million in total assets and $62.5 million in total deposits. First Choice Bank will pay the FDIC a premium of 1.5 percent to assume all of the deposits of Vantage Point Bank. In addition to assuming all of the deposits of the Vantage Point Bank, First Choice Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $8.5 million.

http://www.fdic.gov/news/news/press/2014/pr14017.html

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