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2015 First Bank Failure, A Zombie Bank In Florida

By Christopher Menkin

The three branches of First National Bank of Crestview, Crestview, Florida, were closed with First NBC Bank, New Orleans, Louisiana, to assume all of the deposits. Founded February 8, 1956, the bank had 25 full time employees as of September 30, 2014 at their three offices in Crestview. December 31, 2006 year-end they had 45 full time employees. The bank has been dead since 2010.

Note the major drop in equity in 2010 from $15.7 million to $7.6 million, $8.3 million loss, and $17.3 million in non-current loans. Charge off was $5.4 million.

(in millions, unless otherwise noted)

Net Equity
   
2006 $17.9
2007 $17.9
2008 $18.6
2009 $15.7
2010 $7.6
2011 $8.2
2012 $5.6
2013 $2.2
9/30 $813,000
   
Profit  
   
2006 $2.5
2007 $1.8
2008 $834,000
2009 -$3.1
2010 -$8.3
2011 -$1.2
2012 -$2.5
2013 -$2.3
9/31 -$1.6
   
Non-Current Loans
   
2006 $5,000
2007 $2.7
2008 $2.6
2009 $8.8
2010 $17.3
2011 $6.9
2012 $3.2
2013 $570,000
9/30 $348,000

Charge Offs

2006 -$7,000 (-$6,000 consumer loans, -$1,000 commercial/industrial)
2007 -$1,000 ( -$1,000 loans to individuals)
2008 $598,000 ($315,000 commercial/industrial, $203,000 1-4 family, $80,000 construction/land)
2009 $1.6 ($798,000 construction/land, $522,000 commercial/ind., $295,000 1-4 family, -$3,000 ind.)
2010 $5.4 ($4.0 construction/land, $1.1 1-4 family, $165,000 commercial/ind., $123,000 nonfarm/non industrial, $1,000 individuals)
2011 $2.9 ($1.5 construction/land, $1.2 nonfarm-nonresidential, $201,000 1-4 family
2012 -$149,000 ( -$148,000 construction/land, -$1,000 1-4 family residential properties)
2013 $942,000 ($810,000 commercial/industrial, $147, nonfarm/nonres., $35,000 farm land, -$40,000 construction/land -$224,000 ( $1,000 individual, -$221,000 construction/land, -4,000 1-4 family

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

Tier 1 risk-based capital ratio 2.36%

August, 2014 the bank board of directors approved the acquistion by First Commerce Credit Union, based in Tallahassee, the first known instance in Florida. Dale E. Rice Jr., president and CEO of First National, was to remain with First Commerce as regional executive with responsibilities including oversight of the day-to-day operations in Crestview.

"As a multi-generational family bank … and with our customers in mind, our board members have decided to take a less active role in the banking industry," said longtime board member J.D. "Jake" Wingard, according to the Crestview News Bulletin.

The transaction required the approval of four state and federal regulatory agencies, but evidently did not win approval.

At the time, Wingard said the bank had almost 10,000 customers. Wikipedia shows the city close to Louisiana with a population of 20,978, receiving "65 inches (1,700 mm) of rainfall annually, the second-most of any city in the state of Florida, next to Fort Walton Beach with 69 inches. The town was once known as 'the icebox of Florida', due to it having the coldest winters in the state."

"As part of the 2005 Base Realignment and Closure round, Crestview will experience further population growth as the U.S. Army's 7th Special Forces Group relocates from Fort Bragg, North Carolina to a newly built cantonment facility on the northern end of the Eglin Air Force Base reservation, approximately six miles south of the city."
- http://en.wikipedia.org/wiki/Crestview,_Florida

The city has 9 banks, including five credit unions.

"About 45.2% of families and 59.7% of the population were below the poverty line, including 56.2% of those under age 18 and 30.4% of those aged 65 or over."
- http://en.wikipedia.org/wiki/Crestview,_Florida

Zillow reports 1053 homes for sale.
http://www.zillow.com/crestview-fl/

As of September 30, 2014, First National Bank of Crestview had approximately $79.7 million in total assets and $78.6 million in total deposits. In addition to assuming all of the deposits of First National Bank of Crestview, First NBC Bank agreed to purchase approximately $62.0 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $4.4 million.

FDIC Press Release:
https://www.fdic.gov/news/news/press/2015/pr15006.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: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.