New book by Larry Connors Click here Improve your trading - See how
The proposed deal would provide the bank $800,000 in needed capital, pay back a $5 million loan to Kansas City-based Bank Midwest, and turn Generations Bank into a more traditional lender.
"That's our plan" for Generations Bank, said Mark Baumgartner, chief financial officer of JTH Financial LLC in Virginia Beach. "Our plans would increase its presence in the Kansas City market."
Brooke's bankruptcy trustee, Albert Riederer, seeks the court's approval of the proposed sale.
Generations is a $90 million bank that has been losing money and shrinking while Overland Park-based Brooke has struggled financially and fallen into bankruptcy. The bank lacks a branch network and owns more investments, such as mortgage-backed securities, than direct loans to borrowers.
That means it has few loan problems but also little earning power. The court filing said the bank was losing money each month.
But Generations' small size made it attractive to JTH.
"We didn't want to be buying other people's problems," Baumgartner said.
He said the buyers also were attracted by a network of 42 agents who help generate deposits for the bank by referring customers in mostly rural Kansas towns to the bank's online operations.
Regulators had ordered the bank last fall to boost its capital levels and seek a buyer. The bankruptcy filing said the bank's capital currently exceeds regulators' requirements.
Under the proposed deal, JTH Financial would buy new shares that would give it a 9.9 percent ownership of Generations.
JTH also would have an option to buy the rest of the bank once it gained regulatory approval to do so.
Baumgartner said the option would be in place for a year.
The purchase price would be slightly larger than the $5 million loan from Bank Midwest.
Brooke Corp. would gain $150,000 from the proposed deal.
Bank failure No. 95
Regulators on Friday shut down Atlanta-based Georgian Bank, the 95th U.S. bank to fail this year.
In coming months, more banks are expected to buckle under the weight of commercial real estate and other loans that go sour. Those failures could imperil the insurance fund for deposits, already at the lowest point in nearly 20 years.
The Federal Deposit Insurance Corp. took over Georgian Bank, with about $2 billion in assets and $2 billion in deposits as of July 24. First Citizens Bank and Trust Co., based in Columbia, S.C., agreed to assume the assets and deposits of the failed bank. Georgian Bank's five branches will reopen Monday as offices of First Citizens Bank.
In addition, the FDIC and First Citizens Bank agreed to share losses on Georgian Bank's roughly $2 billion in loans and other assets.
The failure of Georgian Bank is expected to cost the federal deposit insurance fund an estimated $892 million.
The fund has been so diminished by the wave of collapsing banks that some analysts have warned it could sink into the red by year's end.
To reach Mark Davis, call 816-234-4372 or send e-mail to mdavis@kcstar.com. -- Marcy Gordon, The Associated Press
To see more of The Kansas City Star, or to subscribe to the newspaper, go to http://www.kansascity.com. Copyright (c) 2009, The Kansas City Star, Mo. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
