Three Banks Closed Friday, One closed on Thursday for Jewish Sabbath
Internet, Long/Short Equity, Portfolio Strategy, Banks
Seeking Alpha Analyst Since 2009
Public Savings Bank, Huntingdon Valley, Pennsylvania, was closed on Thursday, rather than the regular end of week of Friday. It was a courtesy as Friday night would have been Sabbath and due to the relationship with the Orthodox Jewish community and ownership of the bank was closed last Thursday.
Jack Miller was listed as CEO as wells as CEO and founders of Gelt Properties and Gelt Financial, which web site says specialized in buying “distressed debts.”
www.linkedin.com/in/hjackmiller
CEO Jack Miller described Public Savings Bank as "a Shomer Shabbos Bank guided by the principles and rulings of Torah business laws" and other Orthodox Jewish ideas, closing on the Sabbath and doing business over the Internet in Hebrew and Yiddish as well as English and Spanish. The specialized in secured credit cards, usually from those with credit problems in the past; secured Visa credit cards (which require users to deposit money banks can seize if they don't pay on time). The charge offs of credits card debts are high for a small bank.
Charge Offs
2006 $1,000 (1-4 family residential)
2007 $16,000 (1-4 family residential)
2008 $19,000 ($11,000 nonfarm nonresidential, $8,000 other loans)
2009 $69,000 ($45,000 credit cards, $20,000 1-4 family residential, $4,000 consumer loans)
2010 $429,000 ($353,000 1-4 family residential, $76,000 credit cards)
3/31 $36,000 (Credit cards)
6/31 $146,000 ($138,000 credit cards, $8,000 1-4 family residential)
Construction and Land, 1-4 family multiple residential, Multiple Family Residential, Non-Farm Non-Residential
Reportedly the holding company was Gelt Holdings, Inc. ("Gelt" in Yiddish means "money"), and two other subsidiaries had filed Chapter 11 last month in Philadelphia: Gelt Properties, which invests, owns and manages commercial real estate, and Gelt Financial, which specializes in mortgages for real estate investors and small business owners, as well as buying “distressed debt.”
geltproperties.com/portfolio.html
www.spotlightdesign.com/websites/gelt/ab...#
Capital Bank, National Association, Rockville, Maryland, to assume all of the deposits. As of June 30, 2011, Public Savings Bank had approximately $46.8 million in total assets and $45.8 million in total deposits. The bank was formed in 1926, but acquired by Gelt Holdings 2006, the parent of Gelt Financial Corporation.
The FDIC records the bank had 29 full time employees as of March 31, 2011.
Tier 1 risk-based capital ratio 1.588% June 31, 2011.
(in millions, unless otherwise)
Net Equity |
|
| 2006 | $3.9 |
| 2007 | $4.5 |
| 2008 | $4.5 |
| 2009 | $4.67 |
| 2010 | $2.35 |
| 3/31 | $1.43 |
| 6/30 | $721,000 |
Profit |
|
| 2006 | $10,000 |
| 2007 | -$66.000 |
| 2008 | -$181,000 |
| 2009 | -$52,000 |
| 2010 | $2.34 |
| 3/31 | -$922,000 |
| 6/30 | -$739,000 |
Non-Current Loans |
|
| 2006 | $813,000 |
| 2007 | $865,000 |
| 2008 | $1.7 |
| 2009 | $2.36 |
| 2010 | $3.0 |
| 3/31 | $4.4 |
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $11.0 million.
http://www.fdic.gov/news/news/press/2011/pr11136.html
The five branches of Lydian Private Bank, Palm Beach, Florida, were closed with Sabadell United Bank, National Association, Miami, Florida, to assume all of the deposits. Founded April 6, 2000, the Lydian and Virtual Bank had 170 full time employees March 31, 2011 at two offices in Palm Beach, one in North Palm Beach, Coral Gables, Gardens, Naples, Sarasota, and Tampa (seven offices, according to the FDIC filing.) The fifth largest bank to fail this year.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $293.2 million.
The bank began as an internet bank known as "VirtualBank," offering on line bank and mass-market home loans nationwide, but in 2002 co-founder and CEO Rory Brown, a former executive at Ocwen Financial Group, made a new division, trying to move into a high-end "private bank after high net worth clients" named the country of Lydia (current day Turkey) which produced the world’s first coins around 600 B.C., and using the Ancient Lydian coin as a logo to represent "old wealth."
After charge offs on residential mortgages, investors put in $40 million in capital in 2009 and first quarter of 2010. It was not enough to stop the bleeding from the residential mortgage loans that the bank had made, as can be seen in the numbers below:
(in millions, unless otherwise)
Charge Offs
2006 $84,000 ($65,000 loans to individuals...)
2007 $4.85 ($4.8 1-4 family residential)
2008 $23.2 ($23.2 1-4 family residential)
2009 $63.0 ($52.7 1-4 family residential, $7 to individuals, $1.6 C&L, $506,000 multifamily)
2010 $61.2 ($31.1 1-4 family residential, $17.7 to individuals, $4.7 com./ind.,$2.1 multifamily
3/31 $15.2 ($12.3 1-4 family residential, $2.7 to individuals, $321,000 construction/land development)
Tier 1 risk-based capital ratio 4.96%, March 31, 2011
Non-Current Loans |
|
| 2006 | $3.0 |
| 2007 | $9.4 |
| 2008 | $58.7 |
| 2009 | $84.9 |
| 2010 | $45.2 |
| 3/31 | $69.3 |
Profit |
|
| 2006 | $9.7 |
| 2007 | $1.5 |
| 2008 | -$12.4 |
| 2009 | - $8.5 |
| 2010 | -$18.9 |
| 3/31 | -$15.8 |
Net Equity |
|
| 2006 | $91.3 |
| 2007 | $101.5 |
| 2008 | $99.2 |
| 2009 | $121.5 |
| 2010 | $119.9 |
| 3/31 | $77.2 |
Construction and Land, 1-4 family multiple residential, Multiple Family Residential, Non-Farm Non-Residential loans.
The FDIC and Sabadell United Bank, National Association entered into a loss-share transaction on $907.1 million of Lydian Private Bank's assets. Sabadell United Bank, National Association will share in the losses on the asset pools covered under the loss-share agreement.
As of June 30, 2011, Lydian Private Bank had approximately $1.70 billion in total assets and $1.24 billion in total deposits.
www.fdic.gov/news/news/press/2011/pr1113...
The 17th bank to fail in Georgia this year was First Southern National Bank, located in Statesboro. Heritage Bank of the South, Albany, Georgia, to assume all of the deposits.
According to problembanklist.com, "Heritage Bank of the South previously acquired two other failed banking institutions. In December 2009 Heritage acquired failed The Tattnall Bank of Reidsville, GA, and in February 2011 acquired failed Citizens Bank of Effingham of Springfield, GA.
"The holding company for Heritage Bank is Heritage Financial Group of Albany, GA. Heritage Financial was founded in 1955 and has assets of about $700 million. The company is profitable and pays a 1.1% dividend on its shares."
Founded February 5, 2002, First Southern National Bank they had 38 full time employees March 31, 2011.
Tier 1 risk-based capital ratio 4.07% June 30, 2011.
(in millions, unless otherwise)
Profit |
|
| 2006 | $1.2 |
| 2007 | $1.7 |
| 2008 | -$681,000 |
| 2009 | -$3.9 |
| 2010 | -$4.5 |
| 3/31 | -$2.5 |
| 6/30 | -$1.8 |
Net Equity |
|
| 2006 | $13 |
| 2007 | $15 |
| 2008 | $19.7 |
| 2009 | $19.7 |
| 2010 | $16.0 |
| 3/31 | $4.0 |
| 6/30 | $4.6 |
Non-Current Loans |
|
| 2006 | $701,000 |
| 2007 | $938,000 |
| 2008 | $6.2 |
| 2009 | $10.2 |
| 2010 | $18.8 |
| 3/31 | $19.5 |
Charge Offs
2006 $90,000 ($90,000 consumer loans)
2007 $421,000 ($205,000 consumer loans, $165,000 C&L, $59 commercial/Industrial)
2008 $2.6 ($1.7 nonfarm nonresidential, $338,000 commercial/industrial, $235,000 individuals,
2009 $3.8 ($1.8 Construction-Land, $1 nonfarm nonresidential, $514,000 commercial, $293
individuals.)
2010 $10.5 ($6.2 commercial loans, $2.7 const.-land, $$628,000 individual loans, $474,000 1-4 family)
3/31 $1.4 ($$652,000 const.-land, $648,000 nonfarm nonresidential loans, $70 individual loans, $63,000 auto loans)
6/31 $1.7 ($721,000 1-4 family, $647,000 nonfarm nonresidential loans, $75,000 auto, $265,000 individuals.)
Construction and Land, 1-4 family multiple residential, Multiple Family Residential, Non-Farm Non-Residential loans.
As of June 30, 2011, First Southern National Bank had approximately $164.6 million in total assets and $159.7 million in total deposits. Heritage Bank of the South will pay the FDIC a premium of 1.0 percent to assume all of the deposits of First Southern National Bank. In addition to assuming all of the deposits of the failed bank, Heritage Bank of the South agreed to purchase essentially all of the assets.
The FDIC and Heritage Bank of the South entered into a loss-share transaction on $115.7 million of First Southern National Bank's assets. Heritage Bank of the South will share in the losses on the asset pools covered under the loss-share agreement.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $39.6 million.
www.fdic.gov/news/news/press/2011/pr1113...
First Choice Bank, Geneva, Illinois, was closed with Inland Bank & Trust, Oak Brook, Illinois, to assume all of the deposits. Founded July 2, 2001, the bank went from a high of 49 full time employees in December 31, 2006, to 30 full time employees, March 31, 2011, at two offices at the same address of 1900 West State Street, Geneva, Illinois.
The Chamber of Commerce of Geneva describes the city at around 20,000, a suburb, located 40 miles west of Chicago.
www.genevachamber.com/aboutgeneva.html
"Discover Geneva’s historic districts – from the refurbished downtown storefronts to the dozens of treasured Third Street Victorian homes that now house over 100 unique specialty shops and quaint eateries."
www.genevachamber.com/tourgenevaabout.html
Tier 1 risk-based capital ratio 3.04%, June 30, 2011.
The small bank never recovered for the 2009-2010 charge offs and non-current loans
(in millions, unless otherwise)
Net Equity |
|
| 2006 | $16.6 |
| 2007 | $16.7 |
| 2008 | $15.7 |
| 2009 | $15.3 |
| 2010 | $6.3 |
| 3/31 | $4.9 |
| 6/30 | $3.1 |
Profit |
|
| 2006 | $656,000 |
| 2007 | -$26,000 |
| 2008 | -$1.7 |
| 2009 | -$489,000 |
| 2010 | -$8.9 |
| 3/31 | -$1.4 |
| 6/30 | -$3.1 |
Non-Current Loans |
|
| 2006 | $3.7 |
| 2007 | $1.8 |
| 2008 | $9.9 |
| 2009 | $13.4 |
| 2010 | $13.3 |
| 3/31 | $11.3 |
Charge Offs
2006 $670,000 ($342,000 nonfarm nonresidential, $196 commercial, $126 1-4 family)
2007 $807,000 ($744,000 commercial, $53,000 construction-land, $10,000 other)
2008 $920,000 ($761,000 commercial, $124,000 1-4 family, $28,000 nonfarm nonresidential)
2009 $2.0 ($1.0 construction-land, $409,000 1-4 family, $457,000 commercial)
2010 $3.6 ($1.7 commercial/industrial, $974,000 Construction/land $931,000 1-4 family)
3/31 $1.0 ($995,000 commercial/industrial, $15,000 1-4 family, $7,000 construction/land
development)
6/31 $1.3 ($953,000 1-4 family, $186,000 construction/land development, $186,000 commercial
Construction and Land, 1-4 family multiple residential, Multiple Family Residential, Non-Farm Non-Residential loans.
As of June 30, 2011, First Choice Bank had approximately $141.0 million in total assets and $137.2 million in total deposits.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.0 million.
www.fdic.gov/news/news/press/2011/pr1113...
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
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