Four banks failed and were shuttered on January 27th, 2012 in this post we’ll look at what they had for late and non performing real estate loans and REO, what their capital adequacy ratios and other indicators looked like, and where the distressed assets will end up.
BankEast was a $261MM bank at the time that the failed they had just over $36MM in late and non performing real estate loans and REO. Their capital adequacy ratios were .45 and .89 for tier 1 and total respectively (if you don’t know what this means or why you should care when you’re working with banks then sign up for the free email mini course).
BankEast leaves behind $10,583,000 in commercial real estate, just $495,000 in multifamily, $22,852,000 in construction, and $2,223,000 in residential REO and troubled loans. Substantially all of these assets will undoubtedly be liquidated by U.S. Bank under an FDIC loss sharing agreement. The FDIC press release makes no mention of this however the Purchase and Assumption Agreement do reference residential and commercial loss sharing.
Patriot Bank of Minnesota acquired by First Resource Bank
The FDIC said this of the agreement in their press release
The FDIC and First Resource Bank entered into a loss-share transaction on $79.4 million of Patriot Bank Minnesota’s assets. First Resource 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.
Patriot Bank’s troubled assets consisted mainly of construction loans and REO although they did also have a modest amount of commercial real estate ($3.9MM).
First Guaranty had roughly $120MM in troubled real estate assets the bulk of which are loans on non owner occupied commercial real estate however they also struggled with and left behind construction, multifamily, residential, and agricultural late and non performing loans and REO.
The FDIC had this to say about it:
The FDIC and CenterState Bank of Florida, National Association entered into a loss-share transaction on $292.9 million of First Guaranty Bank and Trust Company of Jacksonville’s assets. CenterState Bank of Florida, National Association will share in the losses on the asset pools covered under the loss-share agreement.
I should think Florida’s investors should be talking to CenterState for sure.
Tennessee Commerce Bank acquired by Republic Bank
Tennessee Commerce Bank bequeathed just over $60MM in problem real estate loans and REO either the FDIC or to Republic Bank. More than half of the assets were commercial real estate almost all of said total was comprised of nonaccrual loans on owner occupied commercial real estate.
Notably Tennessee Commerce also had more than $18MM in multifamily split evenly between non-accrual loans and REO.
The FDIC said this:
As of September 30, 2011, Tennessee Commerce Bank had approximately $1.185 billion in total assets and $1.156 billion in total deposits. In addition to assuming all of the deposits of the failed bank, Republic Bank & Trust Company agreed to purchase approximately $203.9 million of the failed bank’s assets. The FDIC will retain most of the assets for later disposition.
Presumably some of these assets will eventually show up on the FDIC’s Real Estate Assets for Sale list, but don’t look for that to happen too fast…
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