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Bank Troubles in Georgia, Florida and Arizona again


 

Two banks failed in Georgia bringing the total bank failures in the state for 2011 to sixteen.


 

The two branches of High Trust Bank, Stockbridge, Georgia, were closed with Ameris Bank, Moultrie, Georgia to assume all the deposits. Formed January 3, 1966, the bank went from a high of 38 full time employees to 21, March 31, 2011 with an office in Leary, opened 2006, and main one in Stockbridge.

Note the increase in Net Equity below from $2.2 million in 2006 to 2007; not an error. Originally locally owned and operated a group of well-known members of the Indian-American business community came in, added new capital, and began a very aggressive lending policy. The investors include Mukesh "Mike" Patel, R.C. Patel, Dhiru "Danny" Patel, Mukund "Bobby" Patel, Narendra "Tony" Patel, Dr. Gopal Rao and Burt Blackmon.

According the Atlanta Journal Constitution, " Some of those new investors and directors also had ties to two other largely Indian-American-owned institutions: Duluth-based Haven Trust Bank, which failed in December 2008, and Haven Trust Bank of Ponte Vedra Beach, Fla., which failed last year."
http://www.ajc.com/business/fdic-closes-two-georgia-1019098.html

"High Trust will focus on commercial and residential lending," R.C. Patel said in a statement of their intention when they got involved in the bank. "We will target towards the next-generation of borrowers. Young entrepreneurs are increasingly expanding into more sophisticated businesses than their parents and they want financing from stable, creative institutions that match their forward-thinking plans. We want to appeal to these individuals, along with serving the regular broader market."

Mike Patel said that the Indian community in the United States was looking at entering the banking sector and ventures like his were only a harbinger of things to come.
 

"The Indian community is getting into the banking environment," said Patel, who also owns 18 hotels. "We will be focusing on customer service and will go the extra mile to provide satisfaction to our customers."
www.indusbusinessjournal.com/

Ironically problembanklist.com reports the buyer of the bank "Ameris Bank has a very high troubled asset ratio of 92% and is given a low score for overall institutional financial strength by depositaccounts.com which ranks the financial health of banks. Although Ameris Bank is technically well capitalized, it has a large amount of nonperforming and REO assets.

"Ameris Bank is one of the few banks that still owe the US Treasury money under the TARP program. Ameris was given $52 million through the TARP Capital Purchase Program in November 2008. Although Ameris has made the interest payments due on the loan, the Bank has not repaid the original loan of $52 million. The question of why regulators would sell a failed bank to a problem bank has been previously raised.

"The stock of Ameris Bancorp is trading at almost 70% below its price level of 2007. After trading above $25 in 2007, Ameris closed Friday at $9.23."

problembanklist.com/high-trust-bank-of-g.../
 

(in millions, unless otherwise)
 

Net Equity

 
2006 $2.2
2007 $22.5
2008 $20.5
2009 $10.6
2010 $6.5
3/31 $2.4

Profit  
2006 $535,000
2007 -$326,000
2008 -$3.4
2009 -$9.8
2010 -$3.7
3/31 -$4.0

Non-current loans
2006 $93,000
2007 $75,000
2008 $10.9
2009 $33.4
2010 $35.1
3/31 $41.1


 

Charge Offs

2006- $86,000 ($51,000 1-4 family, $25,000 other loans)

2007- $186,000 ($176,000 1-4 multiple) $10,000 loans to individual, $10 consumer loans)

2008- $2.0 ( $1.8 L&C, $196,000 1-4 family, $102,000 individuals, $102 consumer loans)

2009- $7.9 ($5.8 L&C, $532,000 1-4 family, $1.3 nonfarm-non res, $210 commercial loans)

2010- $2.1 ( $1.3 L&C, $675,000 1-4 family, $188,000 non farm-non residential)

3/31- $1.4 ($922,000 L&C, $253,000 1-4 family, $186,000 nonfarm, $17,000 individuals)
 

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

Tier 1 risk-based capital ratio: 1.74%

As of March 31, 2011, High Trust Bank had total assets of $192.5 million and total deposits of $189.5 million.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for High Trust Bank will be $66.0 million
http://www.fdic.gov/news/news/press/2011/pr11120.html

 


One Georgia Bank, Atlanta, Georgia was closed with Ameris Bank, Moultrie, Georgia to assume all the deposits. Founded May 5, 2006 the bank went from a high of 31 full time employees to 25 full time employees March 31, 2011.
 


 

“One Georgia Bank has evolved into one of the top SBA and USDA lenders in the States of Georgia fulfilling the financial needs of the small business owners and entrepreneurs in our market area.”
www.onegeorgiabank.com/about.html



Willard "Chuck" Lewis

September 17, 2010 the board of directors dismissed its CEO Williard "Chuck" Lewis, where they thought "the bank needs a fresh vision, according to bank co-founder Billy Lovett. In reality, it was much too late as look at the dramatic drop in equity from 2009 to 2010 and the $17.9 million loss December 31, 2010.
www.bizjournals.com/atlanta/stories/2010...

Like High Trust Bank story above, Americ Bank also bought this winner. Land and Construction loans plus commercial and industrial loans were their main loan failures.

(in millions, unless otherwise)

Net equity  
2006: $22.4
2007: $21.8
2008: $22.1
2009: $23.4
2010: $5.5
3/31: $3.7

Profit:  
2006: -$1.9
2007: -$1.1
2008: -$2.2
2009: -$3.27
2010: -$17.9
3/31: $1.5

Non-Current Loans:
2006: 0
2007: $500,000
2008: $8.0
2009: $13.7
2010: $19.7
3/31: $23.8

Charge Offs

2006- 0
2007- 0
2008- $788,000 ($783,000 commercial & industrial loans, $5,000 loans to individual
2009- $4.2 ( $2 L&C, $1.2 nonfarm, $493,000 commercial loans, $322 loans to individuals)
2010- $10.9 ($5.4 L&C, $4.3 nonfarm, $2.1 commerical,$788,000 1-4 family, $268,000 multi)
3/31- $45,000 ($45,000 commercial and industrial)

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

Tier 1 risk-based capital ratio: 2.37%

One Georgia Bank had total assets of $186.3 million and total deposits of $162.1 million.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for One Georgia Bank, $44.4 million.

www.fdic.gov/news/news/press/2011/pr1112...
 


 

The six branches of First Peoples Bank, Port Saint Lucie, Florida were closed with Premier American Bank, National Association, Miami, Florida, to assume all of the deposits. Founded April 26, 1999 they had 17 full time employees 2006, but a high of 31 full time employees 2009, and 71 full time employees March 31, 2011, opening their second office in Port Saint Lucie 4/26/1999, then in 2003 Stuart, 2004 in Fort Pierce, 2006 in Vero Beach, and two in 2008, Palm City and Saint Lucie West.

As the bank continued its expansion, including branches and loans in the area they opened, they were moving rapidly into a real estate market going the other way just as rapidly. In less than two years after raising $400 million from investors to capitalize, the assets acquired were $3.5 billion and they thought they were ahead of the game. Compared to other Florida banks, they were about a year ahead, as it started in 2008 but in 2009 hit them hard with a $6.3 million drop in equity, but worse a $9 million loss in 2009 with $16 million in non-current loans resulting in a $5.6 charge off in 2010.
 

(in millions, unless otherwise)

Net equity  
2006: $12.6
2007: $17.9
2008: $20.5
2009: $14.2
2010: $6.6
3/31: $2.5

Profit:  
2006: $678,000
2007: $273,000
2008: -$2.8
2009: -$9.0
2010: -$7.6
3/31: -$4.1

Non-Current Loans:
2006: $343,000
2007: $1.7
2008: $10.6
2009: $16.0
2010: $12.3
3/31: $9.5

Charge Offs

2006 $11,000 ( $11,000 consumer loans)
2007 $293,000 ( $127,000 commercial loans, $123,000 C&L, $43 loans to individuals)
2008 $3.9 ( $1.3 C&L, $1 farm land, $655,000 1-4, $542 commercial & Industiral,$357,000 consumer)
2009 $2.9 ( $900,000 1-4, $700 C&L, $140,000 farm land, $748 commercial, $277 individuals)
2010 $5.6 ( $2.8 nonfarm, $748,00 C&L, $331,000 farm land, $982,000 1-4, $471,000 other
consumer)
3/31 $1.9 ($1.2 nonfarm, $267,000 C&L, $162,000 1-4, $223, commercial, $61,000 other consumer)

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

Tier 1 risk-based capital ratio: 1.81%


 

In May, 2011 Premier Bank purchased Coastal Bank from its failure "...since its formation in April 2009, Bond Street has raised approximately $740 million and its wholly-owned subsidiary Premier American has acquired certain of the assets and assumed certain liabilities (including substantially all deposits) of 7 failed banks in Florida from the FDIC and now operates 39 branches from Naples to Sarasota and Brooksville on the West Coast of Florida, Miami to Daytona Beach on the East Coast of Florida, and Orlando in Central Florida. It now has become the sixth largest bank in Florida, at the same time, creating a "win-win" for the FDIC.
leasingnews.org/archives/May2011/5_09.ht...

As of March 31, 2011, First Peoples Bank had approximately $228.3 million in total assets and $209.7 million in total deposits.

www.fdic.gov/news/news/press/2011/pr1112...

Summit Bank, Prescott, Arizona, was closed with The Foothills Bank, Yuma, Arizona, to assume all of the deposits. Founded November 4, 2002, went from a high of 30 full time employees in 2007 to 17 full time employees March 31, 2001. The acquisition of Summit Bank is the first acquisition of a failed bank by The Foothills Bank. They agreed to pay the FDIC a premium of 0.25% on the deposits assumed and also agreed to purchase all of the failed bank’s assets.

December 10, 2010 the bank shut its branches in Prescott Valley and Chino Valley and on March 3, 2100 president and CEO "Bill" Frank announced the bank was for sale, that they were unable to raise additional capital to satisfy regulatory requirements.
www.prescottaz.com/main.asp?SectionID=1&...

March 31, 2011, FDIC records a $1.15 million charge off in construction and land loans bringing the Tier 1 risk-based capital ratio to 2.52%

Again, the blame is not only on management, but the board of directors who lost their investment and their friends and colleagues investment in their bank.

Board of Directors

Dr. Gordon Ritter, Physician, Chairman of the Board
Owen "Buz" Mills, Gunsite Academy<www.gunsite.com&gt;
Tonia Fortner, Retired Business Owner
William F. Frank, Summit Bank, President & CEO/

 

Advisory Board
 

Paul R. Madden, *Gallagher & Kennedy, P.A.* <www.gknet.com&gt;
J.T. Purvis, Northern Arizona Commercial *National Realty of Prescott *
<www.nationalrealtyaz.net&gt;
Mike Normandin, CarpetOne
Dennis House, *House-Chilson* <www.housechilson.com&gt;
John Mull, Adams & Mull Attorneys at Law

(in millions, unless otherwise)

Net equity  
2006: $8.0
2007: $8.2
2008: $7.8
2009: $5.9
2010: $2.6
3/31: $1.5

Profit:  
2006: $1.0
2007: $171,000
2008: -$1.4
2009: -$1.9
2010: -$3.3
3/31: -$1.1

Non-Current Loans:
2006: 0
2007: 0
2008: $2.3
2009: $3.2
2010: $4.0
3/31: $4.8

Charge Offs
2006 0
2007 0
2008 $1.0 ($942,000 L&C, $30,000 1-4, $48,000 commercial and industrial)
2009 $859,000 ($560,000 L&C, $210,000 commercial & industrial loans, $34,000 1-4, $46,000
nonfarm)
2010 $1.8 ( $1.1 L&C, $600,000 commercial and industrial loans, $119,000 1-4)
3/31 $1.15 ( $1.1 L&C, $54,000 farmland)

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

Tier 1 risk-based capital ratio 2.52%

As of March 31, 2011, Summit Bank had approximately $72.0 million in total assets and $66.4 million in total deposits. The Foothills Bank will pay the FDIC a premium of 0.25 percent to assume all of the deposits of Summit Bank.The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $11.3 million
www.fdic.gov/news/news/press/2011/pr1112...

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