Bank Prez down with his bank plus two more banks closed
The 38 branches of First Community Bank, Taos, New Mexico, were closed with U.S. Bank, (NYSE:USB) Minneapolis, Minnesota, to assume all of the deposits.
“This acquisition is an extension of U.S. Bank's banking franchise into its 25th contiguous state, and it immediately establishes us as one of the top three banks in terms of market share in the attractive New Mexico market. It is a great fit for both companies since First Community Bank and U.S. Bank share a similar community banking model which will help to ensure a smooth transition for customers and employees,” noted John Elmore, executive vice president of community banking at U.S. Bank.
He told the Santafenewmexican.com in a telephone interview late Friday why First Community Bank had failed: "You can look at their financial statements and see that they had very heavy commercial investments in commercial real estate with a lot of it being outside of the New Mexico market."
"New Mexico is a state we have always looked at and been desirous of trying to find the opportunity to become a major player in the state," he said. "... Because of the problems they had, they were not able to invest and do some things maybe in some of the markets that they would have liked ... so we will be looking at additional investments."
First Community Bank was first founded in 1922 in Taos under the name First State Bank. It was acquired by First Community Bank in 1988 and at its height, it included 62 branches in four states.
December 31, 2008 the bank had 813 full time employees, but by September 30, 2010 it was down to
494 full time employees, according to FDIC records. Founded January 1, 1922, there were 12 in Albuquerque, five offices in Santa Fee, two each in Belen, Clovis, Las Cruces, Rio Rancho, Taos, Arizona, and two in Phoenix Arizona, plus one in Sun City, Arizona. They also had a branch in Bernalilo, El Prado, Gallup, Grants, Los Lunas, Moriarty, Placitas, and Portales.
Bank equity 2008 was $254.7 million, 2009 $146.5 million following losses of $149.2 million year-end 2008 and $107.98 million 2009 after charge offs of $80 million in construction and land development, $14.2 million secured by nonfarm nonresidential properties., $8.9 million 1-4 family residential properties, $7.4 million commercial and industrial loans, a total of $113 million in charges offs as well as $247.7 million in non-current loans.
September 30, 2010 found the bank equity down to $52 million from $254.7 the previous quarter in 2009. The bank had also lost $98.1 million September 30, 2010 with $259.3 million in non-current loans after charging off $102.5 million ($65 million in construction and land development, $23.9 secured by nonfarm nonresidential properties, $6.3 million in commercial and industrial loans, $5 million secured by 1-4 family residential properties, $886,000 to loans to individuals, $$534,000 secured by multifamily residential properties, and $729,000 secured by farmland. Tier 1 risk-based capital ratio: 2.68%.
As of September 30, 2010, First Community Bank had approximately $2.31 billion in total assets and $1.94 billion in total deposits. In addition to assuming all of the deposits of the failed bank, U.S. Bank, National Association agreed to purchase essentially all of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $260.0 million.
Bank President goes down with his own bank.
The four branches of Evergreen State Bank, Stoughton, Wisconsin with McFarland State Bank, McFarland, Wisconsin, to assume all of the deposits. The bank was formed October 1, 1899 and had 53 full-time employees with three branches in Stoughton, one in Janesville and one in Sun Prairie.
Among the 100 shareholders who lost money was the bank President and CEO Jim Farrell, who according to the Wisconsin State Journal, filed for Chapter 7 less than a month ago, December, 2010. He reportedly had purchased a large amount of stock in the bank, borrowing heavily from two local banks to make the purchase.
He reportedly borrowed more than $2 million in his effort to capitalize the bank and keep it in business.
Equity year-end 2008 was $27 million, $22.3 million year-end 2009, and $3.2 million September 30, 2010. The bank had lost $2.35 million year-end 2008, and $3.5 million year-end 2009 with $12.3 million noncurrent loans.
September 30, 2010, Non-current loans had risen to $17.3 million and the bank was showing a $21.1 million loss September 30, 2010 after $6.2 million in real estate charge offs ($2 million in nonfarm nonresidential property, $1.7 million in multi-family residential property, $1.46 million in 1-4 family residential property, $1 million in construction and land development, but the largest, $4.6 million in commercial and industrial loans.
Tier 1 risk-based capital ratio: 1.26%
As of September 30, 2010, Evergreen State Bank had approximately $246.5 million in total assets and $195.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, McFarland State Bank agreed to purchase essentially all of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $22.8 million.
Closed but no bank taking over
FirsTier Bank, Louisville, Colorado, was closed Friday by the Colorado Division of Banking and became the second bank this year not to be taken over by another bank. The office will remain open until February 28, 2011, to allow depositors access to their insured deposits and time to open accounts at other insured institutions.
This is the second bank to fail in Colorado this year. Last week saw the eight branches of United Western Bank close, the first billion dollar plus banking failure of 2011.
The bank was formed June 30, 2009 and had 9 offices, one in Boulder, Broomfield, Denver, Greenwood Village, Louisville, Loveland, Parker, Westminster, Adams County, and Westminster, Jefferson County. There were 102 full time employees.
Gerald Billings, a senior ombudsman specialist for the FDIC, told Fox 31 (KDVR.com), "The bank failed primarily because of the real estate development loans that they made not being able to repay the bank, "Bank equity had dropped from $62.5 million year-end 2008 to $25.7 million year-end 2009 with $160.1 million in noncurrent loans. The bank had lost $36.25 million year-end 2009 after $6.4 million charge off in commercial and industrial loans, $1.6 million in construction and land development, $978,000 in 1-4 family residential properties, and $776,000 in nonfarm nonresidential properties.
September 30, 2010 noncurrent loans were $145.7 million with net equity down to $1.6 million (2008 was $62.5 million) and a loss of $16 million following charge offs of $11.9 million in construction and land development, $1.66 million in nonfarm nonresidential properties, $198,000 farm land, $335,000 in 1-4 family residential properties and $1.9 million in commercial and industrial loans. Tier 1 risk-based capital ratio: 1.59%.
Note: Year-end FDIC numbers were not available, and assuming from other reports, there is more losses, as Coloradodaily.com reported: "Earlier this month, FirsTier bought back Calmante Rock Creek, a benighted luxury townhome development in Superior, in a foreclosure auction. FirsTier had financed Calmante with $10 million in loans." It certainly would have given the bank a negative net equity and the high noncurrent loans show there would be more defaults coming.
Beginning today, Monday, depositors of FirsTier Bank with more than $250,000 at the bank may visit the FDIC’s Web page "Is My Account Fully Insured?" at www2.fdic.gov/dip/Index.asp to determine their insurance coverage.
As of September 30, 2010, FirsTier Bank had $781.5 million in total assets and $722.8 million in total deposits.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $242.6 million.
Should not have been closed?
Here is one that does not appear on the surface it should have been closed; however, The First State Bank, Camargo, Oklahoma, was closed with Bank 7, Oklahoma City, Oklahoma, to assume all of the deposits.
Established September 29, 1911, the bank had 8 full time employees with agricultural specialization. The bank looks like it is the middle of no where, survived the depression, the great dust storm of Oklahoma, and from its financial statement to the FDIC seems to be healthy. Perhaps its only negative is its location.
"Population 115...The median income for a household in the town was $23,750, and the median income for a family was $36,875. Males had a median income of $32,083 versus $28,125 for females. The per capita income for the town was $20,417. There were 20.6% of families and 24.3% of the population living below the poverty line, including 20.0% of under eighteens and 46.7% of those over 64."en.wikipedia.org/wiki/Camargo,_Oklahoma
Bank net equity had risen from $2.3 million 2008, $2.96 million 2009, and $3.2 million September 30, 2010. The bank made $32,000 year-end 2008, $757,000 year-end 2009 with noncurrent loans of $95,000, after charging off $296,000 to individuals and $68,000 commercial and industrial loans. September 30, 2010 net profit was $666,000 after charges offs of $380,000 in loans to individual and $66,000 in commercial and industrial loans with noncurrent loans $147,000. The financial numbers look healthy and the Tier 1 risk-based capital ratio 8.79%. There is perhaps more to the story, but not found on line.
As of September 30, 2010, The First State Bank had approximately $43.5 million in total assets and $40.3 million in total deposits. In addition to assuming all of the deposits of the failed bank, Bank 7 agreed to purchase essentially all of the assets.
Tier 1 risk-based capital ratio 8.79%
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $20.1 million.
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