Kitsap Business and Economy

By Rachel Pritchett
rpritchett@kitsapsun.com
BAINBRIDGE ISLAND
Deeply troubled American Marine Bank has agreed to strengthen its capital and maintain adequate loan-loss reserves, according to a new pact it has made with regulators.
It also has agreed have strong management and make sure its board of directors is plugged in to routine workings of the bank.
The consent order, similar but less onerous than a cease-and-desist order, was signed in November by Federal Deposit Insurance Corp. and Washington Department of Financial Institutions, the regulatory bodies that oversee banks.
The Bainbridge Island-based bank was caught holding a number of real-estate and bank-participation loans that defaulted when the economy tumbled into recession in the fall of 2008.
According to the FDIC, as of Sept. 30 — the end of the third quarter — the bank had $28 million in noncurrent loans and leases, up from $14 million a year ago.
In addition, it recently became owner of the bankrupt White Horse golf and housing development near Kingston after it went unsold in a
foreclosure auction. American Marine was its prime lender. Bankruptcy papers say White Horse was in arrears to the bank for nearly $6 million.
According to the order, American Marine must have good managers. American Marine’s chief financial officer, Renzo Lucioni, stepped into the roles of chief executive officer and president after the swift departure of Rex Townsend in July following an FDIC review of the bank in June.
No other management changes have been announced since then.
In addition, the order states that the American Marine board of directors must take a more hands-on approach to its duties than it had previously. The board is chaired by Alice Tawresey of Bainbridge Island, a former mayor and state agency official.
Also, the bank must increase and maintain its “Tier 1,” or “core” capital. As of the end of September, the bank had
$13 million in Tier 1 capital, down from $34 million a year ago, according to the FDIC.
It must also maintain an adequate reserve for loan losses. That stood at
$7 million at the end of September.
American Marine is expected to be in a loss position for most of 2009, according to the press statement that was issued by the bank.
The order was not unexpected; the bank has worked with the FDIC for months on it.
Lucioni said in a statement: “The bank has already taken steps to replenish capital, update lending practices, improve asset quality and ensure liquidity as a result of our June regulatory exam.”
In order to raise money to set it back on firm footing, bank leaders hired an investment banker in August.
But Lucioni said that effort has not yielded much at all, and the bank now is looking to merge.
“We are now focusing a lot more on finding a merger partner,” said Lucioni, who declined further detail.
Meanwhile, deposits at the bank have shrunk somewhat.
Total deposits as of Sept. 30 were $308 million, down from $321 million a year ago.
Total assets as of Sept. 30 were $373 million, down from $408 million in September 2008.
American Marine was founded in 1948 and today has 11 officers in Puget Sound, north Mason County and the north Olympic Peninsula.

This entry was posted on Thursday, December 17th, 2009 at 11:17 am by Rachel Pritchett and is filed under Uncatagorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.