As you may already know by now three banks were closed on on January 20th. In this post we’ll take a look at warning signs that existed and the REO and non-performing loan portfolios they left behind.
- American Eagle Savings Bank (previously regulated by the OTS, no data available)- Boothwyn, PA acquired by Capital Bank, N.A.
- The First State Bank – Stockbridge, GA acquired by Hamilton State Bank
- Central Florida State Bank – Belleview, FL acquired by CenterState Bank of Florida, N.A.
All three of the banks suffered to one degree or another from bad real estate investments and the acquiring institutions will take these assets on to their balance sheets under loss share agreements.
American Eagle Savings Bank
Unfortunately we’re still waiting for the banks that were previously report through the OTS (now the OCC) to report in a more standard way so that their data is available so for the moment we don’t have details on American Eagle Savings’ problem portfolio. American Eagle Savings was a single branch outfit so don’t expect to see too much coming out of there. Here’s what the FDIC had to say about it.
As of September 30, 2011, American Eagle Savings Bank had approximately $19.6 million in total assets and $17.7 million in total deposits. In addition to assuming all of the deposits of the failed bank, Capital Bank, National Association agreed to purchase essentially all of the assets.
The First State Bank
The First State Bank of Stockbridge last reported $516MM in assets. The total for their late and non performing loans and REO including commercial, multifamily, construction and residential assets was… ready?… $190,042,000! That means that 36.8% of this bank’s assets were late, non performing, or OREO.
Needless to say their ratios were down the tubes and if you were working with them you’ve wasted your time. The good news is that their assets will transfer to Hamilton State Bank so you should contact them and let them know you’re familiar with some of the assets.
The FDIC and Hamilton State Bank entered into a loss-share transaction on $419.5 million of The First State Bank’s assets. Hamilton State Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.
The First State Bank’s troubled assets included $40MM in commercial real estate assets, $131MM in construction related assets (real estate), and $18.6MM in residential assets. Go get em!
Central Florida State Bank
Central Florida State Bank was quite small with approximately $79.4MM in total assets of which about 21% were late an non performing real estate loans or REO. The bank was taken over by CenterState bank of Florida ($1.9B in assets).
The bank left behind $16.8MM in late and non performing real estate loans and REO including $7.7MM in commercial real estate assets, $111,000 in multifamily assets, $7.2MM in troubled construction loans and REO, and $1.8MM in residential problems.
The FDIC said this of the assets:
The FDIC and CenterState Bank of Florida, National Association entered into a loss-share transaction on $53.6 million of Central Florida State Bank’s assets. CenterState Bank of Florida, National Association will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.
The people I’m talking to expect that the smaller banks will continue to get squeezed out this year. If you’re out there servicing or buying from community and regional banks do your homework and don’t invest a bunch of time with banks that can’t or won’t sell.
You can do the work yourself or you can have our BankProspector software do it for you, but either way expect guard your time this year and pursue the best qualified prospects.