As we move down the food chain of the casualties of the housing crash, I would keep your eye on your bank after reading BANKING: South Florida banks' problem loans rise in the Miami Herald April 18th. The article’s reporter talks about the rating by BauerFinancial of banks based on past due loans:“At the end of 2006, a report from BauerFinancial showed that 15 of 61 South Florida banks had a ratio of nonperforming loans to all loans of 1 percent or more.
But one year later, 33 of the banks topped 1 percent or more in this key measure of a bank's financial health.
Seventeen banks had a ratio of 2 percent or more and 13 banks had a ratio of 3 percent or higher. One year earlier, five banks had ratios of 2 percent or more and three banks were above 3 percent.”
If over 1% isn’t good, what are we to make of a bank rated at a whopping 12.3%? TerraBank N.A. what are you doing? On the Florida Dept. of State website, although in business since 1986, no officers are listed for this bank and there are no Annual Reports to look at. What gives? There is no name change indicated. There should be more information. Readers do you have money at TerraBank? Ask them who is on their Board of Directors. Don't leave without this information or your money.
I looked at just one of TerraBank's customers. The bank reaffirmed a mortgage in June '06 (originally written June 21, '05) worth over $2,000,000 to M&S DEV LLC. The only problem: The Corporation had been inactive since September '05 and still is according to State records.
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From the Daily Business Review 12/17/07:
“Looking ahead, one can identify the banks that are possibly going to have the largest amount of new foreclosed property by looking at their portfolios of assets more than 90 days past due by type of assets,” Henry said.
For example, Northern Trust, which leads South Florida-based banks with $2.3 million in overdue assets secured by one- to four-unit homes, is likely to have the largest amount of new homes foreclosures. Northern Trust’s financials include bank operations in five states after the units were consolidated in late 2006.
Terrabank, with $3.1 million, and Interamerican, with $989,000 in overdue construction and land development assets, could see the biggest increase in that category.
Terrabank also has an 18.6 percent ratio of loans at least 90 days overdue to total loans, by far the HIGHEST IN THE REGION.
“Generally speaking when a bank’s (nonperforming assets) are greater than 5 percent of assets, the bank cannot survive,” Bove said.
Terrabank officials did not respond to requests for comment.
Officials at eight of the 10 largest South Florida banks also declined to comment for this story, but Laurash, the CFO at Great Florida Bank, said the difficulties will continue well into 2008, compounded by real estate’s crucial role in South Florida banking.
http://www.dailybusinessreview.com/news.html?news_id=46232
The president of Terrabank in 2004 was Uriel Mendieta
Man Oh Man ....
This bank should be put down just like Eastern Airlines was back in the early 80s'.
If 12% of non-performing assets was not enough, then you have to deal with the already compounded "local" inebt staff and a bank with no real plan for the future. The Blind leaing the "The Blind". Local circles say that it's only a matter of time before te OCC (just like many times before) will cease operations and begin receivership of Terrabank as well. The question is, how many bad loans, scandles and/or misfits does it take before the OCC will act upon this matter. If the OCC reads this blog (which I'm sure they do), the rest of us depositors are waiting for the finali - Why should we pay for the mistakes from execs that don't know or care about running their bank?
We expect these regulatory agencies to act in the public's best interest, if not that of the FED, yet nothing is done at all. You have to read about it in the local newspaper four years later....
Terrabank is a prime example of loans to close friends, associates and loan morgage brokers for a fee(s) - plain and simple. Central America is alive and well in Miami!
LOL
Terrabank has seen much improvement in 2008, and was one of the few banks in Florida to get any type of profit for 2007. Also, the Bank has always had their financials posted in their website.
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