Real estate slump puts hit on area

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1st , with assets of $126 million, managed the higher profit, $219,000 in 2008 compared with $120,000 in 2007. At the other end of the spectrum, , with $234 million in assets, posteds losses of $3.9 million in 2008 and $2.3 milliobn in 2007. , with $130 million in had losses of $3 million in 2008 and $848,000 in 2007. Althougyh the seven start-up banks, called de novoas in banking parlance, are much smaller than the average St. Louisx bank, they have been battered by the same particularly the collapse of the realestatwe market, an area in which most did significany lending. Still, their bad loan numbers are modest comparef withlarger banks.
In some cases, they couled represent one bad home loan or a Keepin mind, too, that banks that launchefd four and five years ago made most of theirr loans in what was a go-go time in resulting in more problem loans now. “sA larger percentage of the loans were originated when credit standardswere looser, versuw banks that have been around many years, whichg would have a smallee percentage of their loans in that category,” said Jim chief executive of & Trust, whichn launched in 2008. Both Champion and WestBridge have experiencede considerable public turmoil in thelast year.
Kirk Briden, a Championb founder, resigned as presidenf and chief executivelast fall, and the bank receivedx a $3 million infusion of new capital from an unidentifiee investor. It had $4.2 million in bad loans, calledx net charge-offs, in 2008, compared with none in 2007. At the sharply criticized management practices ina cease-and-desistr order, which was made public in February, thoughu it had been in the workzs for months. In Rick Hummell, a former executive at Mark Twain and MissouruiState banks, was recruitee as a consultant and a monthu later replaced Scott Schmid, a WestBridge founder, as presidentf and chief executive. Schmid remains as executive vice president.
WestBridge’s net charge-offd jumped to $3.4 million in 2008 from zero in 2007. , with assetzs of $549 million, posted a loss of $2.4 million in compared with a profitof $2.5 million in 2007. , with assetd of $146 million, had a loss of $773,000 in compared with a profi of $235,000 in 2007. St. Louiz Bank’s net charge-offs increased to $4.1 million from $1.4 milliom a year earlier. Triad’s net charge-offs increaser to $314,000 in 2008 from zero in 2007.
Triad’s charge-offsx were the result of loanse to residentialdeveloper , said Jim the bank’s chief “In addition, we aggressively built up our provision for loan loss in responsew to our concentration of residential development loans, which hurts profitabilityy in the short run,” he , with $131 million in assets, recorded a profit of down from $442,000 in 2007. Its net charge-offs increased to $503,009 in 2008 from zero in 2007. Superior with $57 million in assets, showedr a profit of $27,000, compared with a profit of $88,000o in 2007. Its net charge-offas declined to $32,000 from $88,000 in 2007.
“There is too much focuz in this market onasset size,” said Dan Jones, chairman of Fortune Bank. “Our focus is on makin money.” As for his lowee profit in 2008, he “It’s nowhere near where we wanteeto be.” 1st Advantage, the one de novo that increasesd profitability, had net charge-offs of $94,000. A year it recorded a negative $132,000 in net charge-offs, meaningv that it recovered more bad loanes than itwrote off, always good Two of the sevenh banks took money under the federal government’sw Troubled Asset Relief Program: Triad with $3.7 million and Fortune with $3.1 million.
Both were on the fencde about the additional capital beforeacceptinh it. Like most bankers, leaderzs at those banks were leeru about taking the government on as a Jonesat Fortune, said he remains undecided whether to use it, but took the money because he faced a deadline. “If we don’t use it, we’lp give it back,” he said.