This is the third in a series of five post mortems on the banks that were closed on January, 22nd 2010.
Charter Bank of Santa Fe, NM was a $1.25 Billion dollar bank. It was closed on Friday by the FDIC and reopened as a Beal Bank subsuduary on Monday morning. Beal Bank is a well capitalized but still aggressive lender based in Plano, TX. Charter Bank’s stats on its final call report were as follows:
- Tier 1 Capital Ratio: Less Than 1%
- Non Current Real Estate Loans: 9.41%
- Non-Accrual Real Estate: $67,902,000
- OREO: $21,966,000
This is the first in this series where the problem isn’t glaringly obvious. Charter Bank had made a significant investment in residential loans as well as construction loans. Although total construction problems exceed the residential loan and REO problems by about 25%. Charter Bank had a little more than $800 Million in mortgage loans out at the time that it failed, $100 Million of that was in construction, $114 Million in commercial property loans, and then the $118 Million in loans on land.
Land loans are not something that we track currently in BankProspector, through we will be tracking these in BankProspector V2.0 which is due out towards the end of March. Charter Bank had more than $27 Million in non-performing land loans, with no REO according to our research.
Charter Bank Santa Fe, NM Cause of Death: Residential and Construction Loan Complications