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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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  • 6th Bank To Fail Has Tier 1 Risk-Based 11% Capital Ratio 0 comments
    Apr 28, 2014 1:52 PM

    by Christopher Menkin

    The five branches of Allendale County Bank, Fairfax, South Carolina were closed with Palmetto State Bank, Hampton, South Carolina, to assume all of the deposits. Founded June 1, 1933, a second branch was opened in Fairfax in 1982, then two in Allendale, in 1981 and 1987, and the fifth in Brunson, 2003. At December 31, 2014, the bank had 21 full time employees.

    Allendale County statistics show a declining population going to 9,839 from $10,414 in 2010. Blacks made up 73% of population, with whites 23.7% and Hispanic 2.7%. 36.3% are below poverty level with median household income of $25,566.
    quickfacts.census.gov/qfd/states/45/4500...

    The City of Fairfax had a population of 2,024 at the 2010 census, a loss of over one-third of its population of 3,206 from 2000.
    en.wikipedia.org/wiki/Fairfax,_South_Carolina

    Walter R. Harter, chairman, and his brother, John B. Harter, president, ran the bank, which may have been started by their father John Edward Harter. A 44 bed nursing facility was named after him at Allendale County Hospital. The two men's mother recently passed away at age 104, on February 10, 2014. Leasing News was unable to confirm this was a family-owned bank.

    Allendale County Bank at the end of last year, the last FDIC records available, had a very healthy Tier 1 risk-based capital ratio of 11.04%. In writing these reports, I have never seen a bank failure with such a high ratio. In addition, year-end 2014 shows a $10,000 profit.

    The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $17.1 million.

    Perhaps things really deteriorated in the first three months of this year, but the numbers were not posted by the FDIC.

    Year-end numbers don't seem to show much, except the non-current loans really jumped up the last two years, especially high for such a small bank, it was reported year-end that the average loan was $26,003:

    Non-Current Loans






     

    2006$354,000.00
    2007$159,000.00
    2008$155,000.00
    2009$200,000.00
    2010$62,000.00
    2011$285,000.00
    2012$640,000.00
    2013$1,059,000.00

    Charge Offs

    2006 $439,000 ($333,000 loans to individuals, $105,000 other loans)
    2007 $642,000 ($368,000 loans to individuals, $274,000 commercial/industrial)
    2008 $563,000 ($336,000 loans to individuals, $236,000 commercial/ind., -$9,000 1-4 family res.)
    2009 $694,000 ($385,000 commercial/ind., $309 loans to individuals)
    2010 $504,000 ($267,000 commercial/ind., $237,000 loans to individuals)
    2011 $495,000 ($220,000 commercial/ind.,$181,000 loans to individuals, $94,000 nonfarm/nonres.)
    2012 $471,000 ($243,000 commercial/ind., $138,000 loans to individuals, $90,000 nonfarm/nonres.)
    2013 $407,000 ($187,000 commercial/ind., $151,000 other loans, $69,000 1-4 family res. property).

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

    Net equity and profits
    (In millions, unless otherwise)

    Net Equity






     

    2006$3.20
    2007$3.20
    2008$3.40
    2009$3.60
    2010$3.50
    2011$3.45
    2012$3.40
    2013$3.40

    Profit






     

    2006$12,000.00
    2007$83,000.00
    2008$155,000.00
    2009$72,000.00
    2010$7,000.00
    2011-$38,000.00
    2012-$23,000.00
    2013$10,000.00

    As of December 31, 2013, Allendale County Bank had approximately $54.5 million in total assets and $51.0 million in total deposits. In addition to assuming all of the deposits of the failed bank, Palmetto State Bank agreed to purchase essentially all of the assets.

    FDIC Memoranda December 31, 2013 (in dollars):


     

     

    2013

    2012

    Average assets57,81155,640
    Average earning assets50,01948,729
    Average equity3,4533,480
    Average loans26,00325,904

    http://www.fdic.gov/news/news/press/2014/pr14031.html

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

    Leasing News 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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