HomeLatest NewsFeatured HomebuildersHome Buyer ResourcesBinding ArbitrationResource LinksSubmit ComplaintsView ComplaintsTake Action 101!Report Mortgage FraudMortgage Fraud NewsForeclosure NewsConstruction DefectsHome DefectsPhoto GalleryFoundation ProblemsHomeowner Website LinksHOA Reform
Main Menu
Home
Latest News
Featured Homebuilders
Home Buyer Resources
Binding Arbitration
Resource Links
Submit Complaints
View Complaints
Take Action 101!
Report Mortgage Fraud
Mortgage Fraud News
Foreclosure News
Construction Defects
Home Defects
Photo Gallery
Foundation Problems
Homeowner Website Links
HOA Reform
Featured Topics
Builder Death Spiral
Report Mortgage Fraud
Foreclosure Special Report
Mold & New Home Guide
Special News Reports
Centex & Habitability
How Fast Can They Build Them?
TRCC Editorial
Texas TRCC Scandal
Texas Watch - Tell Lawmakers
TRCC Recommendations
Sandra Bullock
People's Lawyer
Prevent Nightmare Homes
Choice Homes
Smart Money
Weekly Update Message
News
Latest News
HOBB News
Editorials
New Jersey
New Jersey & Texas
Write Letters to the Editors
TRCC in the News
Texas TRCC Scandal
Survey
Fair Use Notice
HOBB Archives
About HOBB
Contact Us
Fair Use Notice
Legislative Work
Your House

 HOBB News Alerts
and Updates

Click Here to Subscribe

Support HOBB - Become a Sustaining Member
Who's Online
We have 2 guests online
ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
Builder Costs Florida Bank Millions
Monday, 05 March 2007

Herald-Tribune: Defunct Builder Costs Florida Bank Millions
The parent of Coast Bank of Florida will post a $17.3 million loss for 2006 as it tries to recover from a major loan crisis. The company said Friday it has added $21 million to its loan-loss reserve, $14 million of which is tied to 482 loans it made to customers of a defunct home builder.  After an "exhaustive" review of those loans, which originally totaled $110 million, Coast now believes it stands to lose $14 million at most.

Herald-Tribune: Defunct Builder Costs Florida Bank Millions

After an "exhaustive" review of those loans, which originally totaled $110 million, Coast now believes it stands to lose $14 million at most.

"This is what the board estimated was the absolutely worse-case basis from this portfolio," said Tramm Hudson, a special adviser to Coast Financial Holdings Inc.

The board added $7 million to the loan-loss reserve to cover potential losses from the rest of the bank's loan portfolio, he said.

The result is a $13.1 million charge that comes off the bottom line.

The 2006 loss of $17.3 million, or $2.65 per share, is a stunning amount for a company of Coast's size.

The loss will erode Coast's capital base and drop it from a "well" to an "adequately" capitalized bank in the eyes of federal regulators.

The decline in capital sets Coast's book value at $8.78 per share, a key number for investors and possible buyers of the company.

Coast has hired investment banker Sandler O'Neill to explore "strategic alternatives" that could include the sale of the company.

Setting aside money for loan losses and taking the big financial hit is an important step toward addressing its problems.

"We believe that the allowance we recorded will adequately provide for any losses arising from these construction-to-permanent and related loan portfolios, while maintaining an adequately capitalized bank," said interim chairman Michael Ruffino.

Sarasota attorney Alan Tannenbaum, who represents dozens of Coast clients, said "it appears the bank is moving closer to reality as to what their exposure is," though he believes that exposure is probably higher.

The bank could lose money from borrowers who walk away from their loans, those who convert their construction loans to permanent loans, or those who want the bank to reduce the value of the loans, he said.

Coast revealed in January that those 482 loans were in jeopardy after the home builder stopped construction.

Bank officials have not named the builder, but its customers have identified it as Construction Compliance Inc. of St. Petersburg.

CCI was building homes in south Sarasota and Charlotte counties. Many of Coast's borrowers were out-of-state speculators who hoped to build and flip the homes for a quick profit.

Coast Bank filed a report with regulators last month stating it lost $4.15 million in 2006, the worst loss in its seven-year history.

The bank will file an amended "call report" reflecting the revamped numbers.

Coast Financial will submit its financial report to regulators on March 15, Hudson said.

Hudson said the $21 million loan-loss provision was a "prudent" response to its loan problems.

"We have been working very closely with bank regulators as the company addresses these issues," Ruffino said.

Coast has lost money in five of its seven years in business. The company went public in late 2003 at $12 per share, but the stock has been hammered since the loan crisis became public.

Coast fired Philip W. Coon, the head of residential construction lending who put the CCI deal together. Also fired was his wife, Melissa, who was head of retail lending.

The bank holding company's shares, which trade on the Nasdaq, were selling for $7.50 at the close of regular trading on Friday, up 7 cents.

Coast announced its loss after the markets closed.

 
< Prev   Next >
Search HOBB.org

Reckless Endangerment
BY: GRETCHEN MORGENSON
and JOSHUA ROSNER

Outsized Ambition, Greed and
Corruption Led to
Economic Armageddon


Amazon
Barnes & Noble

 Feature
Rise and Fall of Predatory Lending and Housing

NY Times: Building Flawed American Dreams 
Read CATO Institute: 
HUD Scandals

Listen to NPR:
Reckless Endangerman
by
Gretchen Morgenson : How 'Reckless' Greed Contributed
to Financial Crisis - Fannie Mae

NPR Special Report
Part I Listen Now
Perry Home - No Warranty 
Part II Listen Now
Texas Favors Builders

Washington Post
The housing bubble, in four chapters
BusinessWeek Special Reports
Bonfire of the Builders
Homebuilders helped fuel the housing crisis
Housing: That Sinking Feeling

Texas Regulates Homebuyers
 
Texas Comptroller Condemns TRCC Builder Protection Agency
TRCC is the punishment phase of homeownership in Texas

HOBB Update Messages

Consumer Affairs Builder Complaints

IS YOUR STATE NEXT?
As Goes Texas So Goes the Nation
Knowledge and Financial Responsibility are still Optional for Texas Home Builders

OUTSTANDING FOX4 REPORT
TRCC from Bad to Worse
Case of the Crooked House

TRCC AN ARRESTING EXPERIENCE
The Pat and Bob Egert Building & TRCC Experience 

Builders Looking for Federal Handouts

Build it right the first time
An interview with Janet Ahmad

Bad Binding Arbitration Experience?
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
or call 1-210-402-6800

Drum Major Institute
for Public Policy

Tort Deform
Report Your Arbitration Experience

Homebuilding Texas Style
And the walls came
tumblin' down

 Texas Homebuilder
Bob Perry Political Contributions

  The Agency Bob Perry Built
 TRCC Connection News
Tort Reform

NPR Interview - Perry's
Political influence movement.
Click to listen 

REWARD
MOST WANTED

ARIZONA REGISTRAR OF CONTRACTORS
Have you seen any of these individuals

 Feature: Mother Jones Magazine
Are you Next?
People Magazine - Jordan Fogal fights back
Because of construction defects Jordan’s Tremont Home is uninhabitable
http://www.tremonthomehorrors.com/
You could be the next victim
Interview with Award Winning Author Jordan Fogal

Special Money Report
Big Money and Shoddy Construction:Texas Home Buyers Left Out in the Cold
Read More
Read Report: Big Money…
Home Builder Money Source of Influence

Letters to the Editor
Write your letters to the Editor

Homeowner Websites

top of page

© 2018 HomeOwners for Better Building
Joomla! is Free Software released under the GNU/GPL License.