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Palm Spring Bank closed by Country Club, Golf Course Losses

Small Banks continue to be swallowed by larger banks

Bank Beat


 


(under the logo, "Locally Owned and Managed")

The three branches of Canyon National Bank, Palm Springs, California were closed with Pacific Premier Bank, Costa Mesa, California, to assume all of the deposits. Formed July 10, 1998 the bank had 70 full time employees with two branches in Palm Desert and Palm Springs.
 


"A golfer tees off at the La Quinta Resort Dunes Course. PGA West and La Quinta Resort now have new ownership after the previous owner defaulted on loans made five years ago. "
Photo: Jay Calderon/The Desert Sun

The entire real estate area has turned up-side down, affecting all life, including the many country clubs and golf courses, struggling with membership. Nine have closed in the last two years. After a year of foreclosure, a group is finally raising money to buy Woodhaven Country Club. Palm Desert Country Club, closed since last summer after its ownership filed for bankruptcy, was recently taken over by a Riverside bank.

"Palm Springs city officials said (last) week they are still working to resolve issues with the owners of Palm Springs Country Club, which has been closed for two years," reports mydesert.com." PGA West and La Quinta Resort, with a total of nine golf courses, now have new ownership after the previous owner defaulted on loans made five years ago when the real estate market was booming."

"Experts say golf courses, from private to public to resort courses, have been hurt on two fronts. First, the number of golfers in the country — approximately 26 million — has remained flat for 20 years despite the explosion of more than 3,500 golf courses being built in the 1990s and into the 2000s."

December 31, 2010 the bank loss was $10 million following almost $3 million in construction and land development charge offs, plus almost $2 million charge offs in 1-4 family residential properties and almost $2.4 million in commercial and industrial loans.

Tier 1 risk-based capital was 1.8%.

As of December 31, 2010, Canyon National Bank had approximately $210.9 million in total assets and $205.3 million in total deposits. Bank equity had dropped from $27.8 million year-end 2008 to $12.6 million year-end 2009 to $3.1 million. A bare profit was made in 2008 of $83,000, but 2009 saw a loss of $17.8 million following charge offs of $3.6 million in construction and land development, $1.9 million in nonfarm nonresidential properties and almost $9 million in commercial and industrial loans. There were almost $21 million in noncurrent loans.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $10.0 million. http://www.fdic.gov/news/news/press/2011/pr11035.html


 


 

Premier American, Miami, Florida, has now acquired over $1.6 billion of failed bank assets from the FDIC. They just acquired the six branches of Sunshine State Community Bank, Port Orange, Florida.

Premier American Bank has made three previous acquisitions of failed banks, including Peninsula Bank in June 2010, and Florida Community Bank and Premier American Bank in January 2010. Premier American Bank was newly chartered in 2010 and is a subsidiary of Bond Street Holdings, LLC, Naples, Florida, formed especially with capitalization of over $400 million with the express purpose of purchasing failed banks in the hard hit state of Florida. Premier American Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of Sunshine State Community Bank.

As of December 31, 2010, Sunshine State Community Bank had approximately $125.5 million in total assets and $116.7 million in total deposits.

Year-end 2010, Sunshine State Community Bank showed a $6 million loss following charges offs of $2.6 million in construction and land development, $1.3 million in 1-4 family residential properties, $720,000 in nonfarm nonresidential properties, $382,000 in commercial and industrial loans. Tier 1 risk-based capital ratio was 1.97% Sunshine Community Bank was formed July 24, 2000 to service Deltona-Daytona Beach-Ormond with three branches in Port Orange, one each in Holly Hill, Ormond Beach, and South Daytona. The bank was down to 45 full time employees September 30, 2010 from the previous September which had 57 full time employees.

Bank equity was $13.2 million year-end 2008 to $7.3 million year-end 2009, $1.68 million year-end 2010. Noncurrent loans in the same periods were $6.8 million year-end 2008, $12.2 million 2009, $17.3 million September 31, 2010.

The bank lost $1.3 million year-end 2008, lost $6.8 million year-end 2009 following charge offs of $1.4 million in construction and land development, $1.3 million in nonfarm nonresidential properties, $1 million in 1-4 family residential properties and $889,000 in commercial and industrial loans plus $253,000 in loans to individuals.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $30.0 million.
http://www.fdic.gov/news/news/press/2011/pr11032.html
 


 

The 2010 year-end FDIC shows a .0035% Tier 1 risk-based capital ratio.

The ten branches of Peoples State Bank, Hamtramck, Michigan were closed with First Michigan Bank, Troy, Michigan, to assume all of the deposits. In the last two years the bank had gone from 146 full time employees to 111 full time employees. the bank was established February 11, 1909, survived the Great Depression, and became FDIC insured December 20, 1934. There were two branches in Sterling Heights and Warren, and a branch each in Farmington Hills, Fenton, Grosse Pointe Woods, Hamtramck, Madison Heights, Southfield, and Troy.

First Michigan previously acquired CF Bancorp in April 2010, then First Banking Center in November 2010. According to problemlist.com, "First Michigan is a well capitalized, privately held community bank with $1.3 billion in assets...had raised $200 million of fresh capital through a private placement transaction. One of the lead investors in First Michigan is billionaire Wilbur Ross, who previously profited in the last banking crisis by making smart acquisitions of failed banks."

As of December 31, 2010, Peoples State Bank had approximately $390.5 million in total assets and $389.9 million in total deposits. First Michigan Bank will pay the FDIC a premium of 0.25 percent to assume all of the deposits of Peoples State Bank.

Peoples State Bank net equity dropped from $30.5 million year-end 2008 to $17.4 million year-end 2009, to $8.6 million, year-end, 2010. The last numbers available from the FDIC on noncurrent loans shows they grew in the same period from $12.5 million, $38 million, to $42.7 million. The bank lost $13.6 million year-end 2008, $12.6 million year-end 2009, following $5.6 million in 1-4 family residential properties charge offs, $5.8 million in loans secured by nonfarm nonresidential properties, $1.6 million in commercial and industrial loans, and $212,000 in loans to individuals.

The FDIC shows a $9.1 million loss September 30, 2010, following $2.9 million in charges off loans secured by nonfarm nonresidential properties, $1 million in construction and land development, $972,000 in 1-4 family residential properties, $384,000 in multifamily residential properties, and over $1 million in commercial and industrial loans. Note the noncommercial loans were at $42.7 million in the September 30, 2010 time period. Year-end 2010 not noted in the FDIC call report.

The FDIC and First Michigan Bank entered into a loss-share transaction on $331.0 million of Peoples State Bank's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $87.4 million.
http://www.fdic.gov/news/news/press/2011/pr11033.html


 


 

Badger State Bank, Cassville, Wisconsin, was closed with Royal Bank, Elroy, Wisconsin, to assume all of the deposits. This small bank was formed January 1, 1910 and was not one of the 17,000 banks that failed during the great depression to the creation of the FDIC in 1933. It had 17 full time employees.


Denniston House
In 1836, Cassville was competing for the honor of becoming capitol of the new Wisconsin Territory; The Denniston House was built that year to house legislators.
 


Cassville Ferry
Between 1833 and 1858, the ferry was a large rowboat.
Ferry service powered by horses on a treadmill started in 1858. Later, the ferry was used to transport vegetables from rich Iowa bottomland fields to the Klindt Geiger Canning Company, founded in 1893. Gasoline engines replaced "horsepower" in 1913

http://www.cassville.org/histor.html
 

According to the Wisconsin State Journal, "In November 2009, the FDIC notified Badger State Bank that it was undercapitalized, meaning it did not have enough of a cushion in case of losses, and in May 2010, regulators ordered "prompt corrective action" such as recruiting investors or finding another bank to acquire it.

"At that time, chief executive officer Louis Okey told the State Journal the problems stemmed from failed real estate development loans in California, Arizona and Florida in which the small bank had participated."

As of December 31, 2010, Badger State Bank had approximately $83.8 million in total assets and $78.5 million in total deposits. In addition to assuming all of the deposits of the failed bank.

Year-end 2008 bank equity was $7.7 million, 2009 $3.7 million, 2010 $1.7 million. Noncurrent loans had decreased in this time period from $5.3 million to $4.3 million. The bank lost $879,000 in 2008, almost $4 million 2009 following charge offs of $1.7 million in loans secured by nonfarm nonresidential properties and $202,000 in "other loans." 2010 the loss was $1.56 million following a charge off of $1.4 million in commercial and industrial loans and $311,000 in "all other loans." Tier 1 risk-based capital ratio was 2.9%.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $17.5 million.
http://www.fdic.gov/news/news/press/2011/pr11034.html
 

Tracking Bank Failures Map:
http://graphicsweb.wsj.com/documents/Failed-US-Banks.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