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Bank Beat—3 Florida, Washington, the Jochners, 1st Mass. +

The fifth in the State of Washington and the 50th bank to fail this year in the United States was City Bank, Lynnwood, Washington. The eight branches with 157 full-time employees will now be under Whidbey Island Bank, Coupeville, Washington; to assume all of the deposits.

As of December 31, 2009, City Bank had approximately $1.13 billion in total assets and $1.02 billion in total deposits. Whidbey Island Bank paid the FDIC a premium of 1.0 percent to assume all of the deposits of City Bank. In addition to assuming all of the deposits, Whidbey Island Bank agreed to purchase approximately $704.1 million of the failed bank's assets.

With heavy lending to developers and homebuilders, the bank has had problems for over the last three years. July 2, 2009, Conrad Hanson, the chief executive of City Bank, told the Seattle Times “The bank already is doing most of what's in the order. It is selling off houses and lots at the rate of $30 million to $40 million a month, he said, and using the proceeds to repay brokered certificates of deposit as they mature.”

The bank was founded April 15, 1974 to service the Seattle-Tacoma-Bellevue area and had 157 full-time employees. Equity had dropped from $416.5 million year-end 2008 to $200.3 million year-end 2009 following a $60.8 million loss year-end 2008 to $104.6 million loss year-end 2009 after $116.6 million charge off including $109.8 million in real estate construction and land development, $4.5 million in construction and industrial loans and $2.3 million in loans to individuals. Tier 1 risk-based capital ratio 4.13%

The FDIC and Whidbey Island Bank entered into a loss-share transaction on $455.6 million of City Bank's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $323.4 million.

As note in earlier Bank Beats, Washington has approximately 90 banks with 1/3 in serious regulatory oversight primarily due to similar problems that faced City Bank.

http://www.fdic.gov/news/news/press/2010/pr10082.html

 

The four branches of Innovative Bank, Oakland, California were closed with Center Bank, Los Angeles, California assuming deposits and branches. Both banks have an Asian following, primarily Korean and Chinese.

Formerly known as the Bank of Oakland, the bank had gone from 98 employees down to 78 employees. The bank was founded in July 1, 1982 and at one time involved Ray Jochner, former Crocker National Bank Leasing Division Vice-President, and his son Tim who was at one time an employee. Executives of Meridian National Bank, after it was sold to Wells Fargo Bank, also were on board. Ray was a lover of fine wine and his son, after starting a successful merchant credit card company, also formed Shadowbrook Winery, Walnut Creek, California. (1)

Equity had gone from $31.1 million to $16.75 at year-end 2009 following a $7.5 million loss in 2008 and $14.4 million loss in 2009 with $14.3 million loss in commercial and industrial loans, $4.57 million in loans secured by non-farm non-residential property. Tier 1 risk-based capital ratio: 5.87%

As of December 31, 2009, Innovative Bank had approximately $268.9 million in total assets and $225.2 million in total deposits. Center Bank paid the FDIC a premium of 0.5 percent to assume all of the deposits of Innovative Bank. The FDIC and Center Bank entered into a loss-share transaction on $178.1 million of Innovative Bank's assets.

In Center Bank Press release they stated, “Three of Innovative's branches will reopen Saturday morning, April 17, during normal business hours as part of the Center Bank franchise, including the Oakland Chinatown and Santa Clara branches in Northern California and one branch in downtown Los Angeles.”

"First and foremost, our overriding goal is to ensure a smooth transition and to provide uninterrupted service for the customers impacted by the regulators' actions today," said Jae Whan (J.W.) Yoo, president and chief executive officer of Center Financial Corporation. "Backed by the strength and security of Center Bank, all Innovative Bank customers can be rest assured that their deposits are safe and fully insured to the maximum permitted by law. We welcome Innovative's customers to the Center Bank family and look forward to offering them a broader array of financial products and services, as well as an expanded geographic network of full-service branches and ATMs.”

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $37.8 million.
 

  1. http://www.wib.org/publications__resources/article_library/2000-02/aug02_jochner.html

http://www.shadowbrookwinery.com/news09JanCCTimes.htmhttp://www.fdic.gov/news/news/press/2010/pr10080.html

Seventh, Eighth, Ninth Banks to Fail in Florida.
 

Riverside National Bank of Florida, Fort Pierce, was closed by the Office of the Comptroller of the Currency with TD Bank, National Association (N.A.) Wilmington, Delaware, a division of Canada’s TD Bank, assuming the banking operations and all the deposits. Riverside National Bank of Florida had total assets of $3.42 billion and total deposits of $2.76 billion. It had gone from 953 full time employees to 811 by the end of 2009 with 61 branches.
 

The bank was reportedly rated “excellent” by BauerFinancial, a research firm in Coral Gables in 2007. As hit hard by the bust in real estate, Riverside was hit very hard with Bank equity the end of 2008 was $94 million to a minus $6.2 million the end of 2009 following two year of loss, $138 million in 2008 and $130 million in 2009 with $79 million in real estate charge offs ($26.8 million construction and land development, $43.88 million in 1-4 family residential properties, $9 million secured by nonfarm nonresidential property). They also had charge offs of $19.5 million commercial and industrial loans, $19.2 million loans to individuals, $4.5 million in other loans. Tier 1 risk-based capital ratio: 3.66%

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Riverside National Bank of Florida, 491.8 million
 

AmericanFirst Bank, Clermont with 20 full time employees was closed by the Florida Office of Financial Regulation with TD Bank, National Association (N.A.) Wilmington, Delaware, a division of Canada’s TD Bank assuming the banking operations and all the deposits.

AmericanFirst Bank had total assets of $90.5 million and total deposits of $81.9 million, Equity had dropped from $9.3 million to $373,000, following two years of loss with a loss of $1.2 million year-end 2008 to $8.79 million year-end 2009, following almost $1 million in real estate charge offs.

The bank was warned by the FDIC on March 26 they had 30 days to raise sufficient capital or sell itself to another financial institution.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for AmericanFirst Bank will be $10.5 million.

First Federal Bank of North Florida, Palatka with 94 full time employees and, was closed by the office of Thrift Supervision with TD Bank, National Association (N.A.) Wilmington, Delaware, a division of Canada’s TD Bank, assuming the banking operations and all the deposits. Net equity had dropped from $2.1 million to $1.3 million, following two years of losses: $1.5 million year-end 2008 to $23.2 million end of year 2009 with $25.9 million in real estate charge offs ($12.6 million construction and land development, $8.9 million in 1-4 family residential, $3.8 secured by nonfarm nonresidential properties, $534,000 multi-family residential properties) and $348,000 to individuals, $20,000 credit cards). Tier 1 risk-based capital ratio: -1.34%

First Federal Bank of North Florida had total assets of $393.3 million and total deposits of $324.2 million. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for First Federal Bank of North Florida.

The FDIC and TD Bank, N.A. entered into a loss-share transaction on $2.20 billion of the three failed Florida banks. Initially, TD Bank, N.A. and the FDIC will share in the losses on assets on a 50% - 50% basis.

There are an estimated 50 banks in Florida under regulation by the FDIC.

http://www.fdic.gov/news/news/press/2010/pr10078.html
 

Seven branches with 69 full-time employees of Tamalpais Bank, San Rafael, California, were closed and the FDIC with Union Bank, National Association, San Francisco, California, to assume all of the deposits of Tamalpais Bank.

Kit Cole, who founded Tamalpais Bank and served on its board of directors before falling ill in 2007, now serves as the chief executive and board chairwoman of Circle Bank in Novato, according to the Marin Independent Journal. He will be going after depositors, Marinites say, with the main problem of the bank being CEO Mark Garwood, who was seeking loans and broker deposits from outside the area, who go to the best return bidder.

The annual report disclosed that Tamalpais Bank has been in default on $5.7 million worth of loans to Pacific Coast Bankers Bank since Sept. 3, 2009, according to the Marin Independent Journal. “The report stated that the bank has the option to foreclose on the collateral securing the loans, which includes the bank's stock. The annual report also disclosed that the bank is in ‘technical default’ to the Federal Home Loan Bank of San Francisco, to which it owes $119 million.

As of December 31, 2009, Tamalpais Bank had approximately $628.9 million in total assets and $487.6 million in total deposits. Union Bank, N.A. paid the FDIC a premium of 2.0 percent to assume all of the deposits of Tamalpais Bank. Bank equity had dropped from $55.7 million end of 2008 to $18.8 million following a $6 million profit to a $36.1 million loss end of 2009 after charge offs of $35.8 million in real estate ($16.9 secured by nonfarm nonresidential, $13.9 from multifamily residential, $4.5 million construction and land development, $242,000 from 1-4 family residential). Tier 1 risk-based capital ratio: 3.58%

The FDIC and Union Bank, N.A. entered into a loss-share transaction on $522.3 million of Tamalpais Bank's assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $81.1 million.

http://www.fdic.gov/news/news/press/2010/pr10081.html
 

The four branches of Butler Bank, Lowell, Massachusetts, were closed with People's United Bank, Bridgeport, Connecticut, to assume all of the deposits of Butler Bank. This was the first bank failure in Massachusetts in 16 years.

The bank had gone from 72 full time employees to 58 at year-end 2009; net equity had dropped from $14.4 million year-end 2008 to $5.8 million year-end 2009. Two years of losses from minus $14.3 million to $9.1 million year-end 2009 following $5.66 million in real estate ($4.6 million construction and land development, $646,000 in non-farm non-residential, $393,000 1-4 family residential, $60,000 commercial and industrial loans, $47,000 loans to individuals.) Tier 1 risk-based capital ratio: 2.80%

As of December 31, 2009, Butler Bank had approximately $268.0 million in total assets and $233.2 million in total deposits. The FDIC and People's United Bank entered into a loss-share transaction on $206.1 million of Butler Bank's assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $22.9 million.

http://www.fdic.gov/news/news/press/2010/pr10079.html
http://www.fdic.gov/news/news/press/2010/pr10082.html


 

The Federal Deposit Insurance Corporation (FDIC) approved the payout of the insured deposits of Lakeside Community Bank, Sterling Heights, Michigan. The bank was closed today by the Michigan Office of Financial and Insurance Regulation, which appointed the FDIC as receiver. There were ten full-time employees left.

The FDIC entered into an agreement with First Michigan Bank, Troy Michigan, to accept the failed bank's direct deposits from the federal government, such as Social Security and Veterans' payments. The FDIC was unable to find another financial institution to take over the banking operations of Lakeside Community Bank. As a result, checks to depositors for their insured funds will be mailed on Monday, April 19th. Brokered deposits will be wired once brokers provide the FDIC with the necessary documents to determine if any of their clients exceed the insurance limits.

Customers who placed money with brokers should contact them directly for more information about the status of their funds.

Bank equity had dropped from $3.1 million to $586,000 following two consecutive year-end losses of $5.42 and $5.48 in 2009 follow $3.3 million in real estate loans ($1.9 construction and land development, $744,000 in 1-4 multi-family residential property and $654 secured by nonfarm nonresidential property.) Tier 1 risk-based capital ratio: 1.41%. As of December 31, 2009, Lakeside Community Bank had approximately $53.0 million in total assets and $52.3 million in total deposits.

The FDIC estimates the cost of the failure to its Deposit Insurance Fund to be approximately $11.2 million.
http://www.fdic.gov/news/news/press/2010/pr10077.html
 

List of Bank Failures:
http://www.fdic.gov/bank/individual/failed/banklist.html

Previous Columns:
http://www.leasingnews.org/Conscious-Top%20Stories/Bank_Beat.htm
 



Disclosure: No position