Signature Posts $15.7M in Losses
by February 7, 2011 12:00 am 53 views
Chairman and CEO of White River Bancshares Inc., Gary Head, said more than half of his bank’s 2010 losses are due to a goodwill impairment on its Brinkley offices.
White River’s sole subsidiary, Signature Bank of Arkansas, filed its fourth-quarter call report with the Federal Deposit Insurance Corp. and it showed a year-to-date loss that had tripled since the end of September.
Of the $15.7 million loss, a bit over $10 million was an impairment to the $11.8 million worth of goodwill that had been carried on Signature’s balance sheet since it spent some $30 million to buy Bank of Brinkley. The goodwill represents the difference between the equity capital acquired with the bank, just under $20 million, and the value of the bank, and bank valuations have taken a hit over the past three years.
Signature’s fourth quarter also included a $3 million write-down on a commercial property that “appraised for $16 million in September of 2009, and $10.5 million in December 2010,” Head said.
The bank also put about $18 million dollars in loan loss reserves during the year.
“No fun, worst year I’ve ever had, but our capital remains strong,” he said.
Signature received a consent order from the FDIC in November and, among other things, is required to maintain tier 1 risk-based capital ratio of 9 percent. The bank’s capital is above the 9 percent mark, he said.
Other Northwest Arkansas banks that were aggressive lenders through 2005 and 2007 also reported losses.
Chambers Bank of Danville had lost $22.1 million at the end of the second quarter but whittled that down to $17.79 million. Chambers made $4.9 million in 2009.
Legacy National Bank of Springdale, which was the originating lender on Brandon Barber’s failed Legacy Building project in Fayetteville, ended the year down $1.79 million. It closed 2009 with a loss of nearly $4.5 million.
Pinnacle Bank of Rogers, lost $1.51 million, up from the $6.3 million in losses at the end of 2009.