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Marco Community Bank makes list of Florida’s most troubled banks
Bank watchdog site gives MCB a D- grade
KELLY FARRELL / Staff
Marco Community Bank, 1770 San Marco Road, is among the state's most troubled banks according to an internet watchdog site. The bank also received a poor review from the Federal Reserve Bank of Atlanta and the Florida Office of Financial Regulation last year and is still being observed by the agencies as they rectify the problems.
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Marco Community Bank, as well as 12 other Florida banks, is among the most troubled in the state according to a recent watch list.
Two other Collier County banks made the “13 most troubled” list on TheStreet.com Ratings, inc., including Partners Bank in Naples and Florida Community Bank in Immokalee.
President and CEO of Marco Community Bank, island resident Richard Storm, called the online reports “bogus,” adding that “a lot of the information they are using is inaccurate. They are kitchen broker writers,” he exclaimed.
Storm cited for example that Marco Community Bank is well capitalized, maintaining about 50 percent more capital than required.
TheStreet.com recognized this strength of capitalization, but sited other significant problems. Marco Community Bank received poor reviews on several other investment Web sites and also is under state and federal monitoring for poor practices.
The Web site grades banks based upon hundreds of factors with five primary components making up the banks’ “financial strength rating.” These components include capitalization, asset quality, profitability, liquidity and stability.
Marco Community Bank received a D- grade on a scale from A to E meaning that according to the watchdogs’ Web site, the bank demonstrates “significant weaknesses which could negatively impact depositors or creditors. In an unfavorable economic environment, these weaknesses could be magnified.”
The only category that received an A grade was capitalization. The other categories brought the overall grade down below passing.
Philip Van Doorn, a senior analyst for TheStreet.com Ratings, chose the most unstable banks based on 2007 year end data, beginning with banks with a “non-performing assets ratio greater than five percent,” he wrote on the watchdog’s site.
The initial list was then updated with first quarter reports available March 31 and further updates are anticipated following second quarter reports this June.
The internet reports aren’t the beginning of the troubles for Marco Community Bank, which is currently under the watchful eye of the Federal Reserve Bank of Atlanta and the State of Florida Office of Financial Regulation. Marco Community Bank (MCBN on the Over the Counter Bullet Board) entered into a written agreement with the Reserve Bank and Office of Financial Regulation in August of 2007 after an examination revealed violations of law and unsafe practices. The written agreement serves as a corrective measure which remains in place until the bank rectifies the problems.
According to the agreement, these are “unsound practices related to asset quality, credit administration, management, risk management and affiliate transactions.”
“(The agreement) is a formal administrative action that includes the things we think the bank should do to get back on track and operating safely. They can’t get out of it until we see everything is rectified within the next exam cycle,” said Linda Townsend, chief of the Bureau of Bank Regulation.
Townsend said the report is confidential so the full nature of the violations is not known to most customers and creditors.
Storm, who has been a Collier County resident for over 20 years, was the bank’s organizing chair when it was founded in 2003, but said it “all happened before his time.” Storm became president and CEO shortly after the state and federal inquiries began in 2007.
According to the written agreement, which is public record, problems included deficiencies in loan policies, under-qualified managers, a high volume of adversely classified loans, lack of a reliable loan grading system, a high level of past due and non-performing loans and a poor evaluation of probable losses, including the existence of unidentified losses in loans adversely classified.
Although the full investigative report is confidential, the agreement required corrections to violations of the Federal Reserve Act. The nature of the violations relates to lending relationships and insider issues.
MCBN also violated accounting practices by Florida Statute and exceeded the limit the bank can lend, particularly to one type of customer — residential first time mortgages on the East Coast, according to Storm. Storm said new management has been hired and the bank has changed its operations.
Based on a banks capital, a bank may only lend 25 percent of their total capital to one customer or project to maximize “risk diversification”, Townsend said.
Storm said the bank has increased its diversification, adding commercial lending in particular.
MCBN’s stock hit their lowest trade value this week, falling from over $18 per share last year to $6.25 May 18.
In addition to declining stock values, Marco Community Bank performed poorly when it came to asset quality and liquidity. Profitability and stability were only slightly higher according to TheStreet.com, but still not favorable. Liquidity is of particular significance to depositors and creditors because at unsatisfactory levels, banks may be unable to honor withdrawals.
Storm said the bank is safe and said it has been building reserves and is also FDIC insured.
The FDIC provides insurance coverage for deposits up to $100,000, but any depositor caught up in a FDIC bank failure may end up waiting weeks before receiving their principal payout. To find a bank’s information visit www.fdic.gov and follow links to “consumer resources” and “bank find” or call 877-275-3342.
Comments
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To bad there isn't a federal agency that oversees municipal government finances.
#1 Posted by blackwidow on May 21, 2008 at 7:09 a.m. (Suggest removal)
Sorry MCB, Orion Bank is the favorite of this 'Marco good ole boy network'..and we all know what happens to businesses, people, associations etc. that the network doesn't favor.
Start packing.
#2 Posted by gernblanstone on May 21, 2008 at 11:35 p.m. (Suggest removal)
Black Widow: In answer to your inquiry, there are Federal, private and State agencies that rate municipal finances. Marco Island has gotten the highest ratings from all of them.
I hope this helps you
Ed Issler
#3 Posted by lauralbi1 on May 22, 2008 at 8:28 a.m. (Suggest removal)
gerblanstone - You are a typical CNN viewer. You only want the news reported to suit your view point on issues. You can not handle a fair and balanced new report or article. I suggest you broaden your view somewhat. This is news. There is a report that gives the Bank a certain grade. Are you suggesting the Eagle not report news? Are you suggesting that we set up some type of citizens or government group that censors our news? Grow up - Gather your news from a variety of sources and form your own opinion. There is more to life than sitting around watching CNN all day.
#4 Posted by MarcoAvenger on May 22, 2008 at 10:32 a.m. (Suggest removal)
I very disappointed in the shoddy reporting by our local community paper. This story is over 12 months old and your reporter didn't even get her facts straight. Your reporter also failed to recognize and report that Marco Community Bank took corrective actions more that 12 months ago. Your article is old news!!! Why bash the Marco Community Bank, which had done more for our community than any other bank on the island. This is a very community minded bank.
What purpose did this article serve? With reporting like this, I will stop reading the Marco Eagle and switch to the other local newspaper.
#5 Posted by DutchmanOnMarco on May 22, 2008 at 11:32 a.m. (Suggest removal)
I was extremely disappointed with this report because of several factors:
1. This so called "news" is at least several months old.
2. Slanted facts: The Feds do look at many areas before they report. Using the term "hundreds" of area just to diminish the importance of capitalization shows little knowledge of banking.
3. Photo of Marco Community Bank taken at least desirable angle shows the "intent" of the reporter.
4. Reporter should do follow up report and what is really being done at bank since this old report was written.
#6 Posted by sharkfloss on May 22, 2008 at 4:22 p.m. (Suggest removal)
How many times has the Eagle written 'feel good' stories about Keith Dameron and Orion Bank; ten,.. fifteen.. a year?
How many 'feel good' stories written about MCB; 0,..1..maybe??
MCB, your getting the short end of the stick.
#7 Posted by gernblanstone on May 22, 2008 at 7:14 p.m. (Suggest removal)
MCB is in BIG trouble! The real problem is Richard Storm and the board; they just can't get anything right. They should take the word "community"out of their name because they are not a community bank! Sold my stock, closed my accounts and moved to a more stable bank with a more honest management team.
#8 Posted by Leroy on May 22, 2008 at 9:57 p.m. (Suggest removal)
Hey, thanks for the "scoop". Isn't this, quite literally, old news? While MCB's issues have been a matter of public record for some time, what is particularly distressing about this article is the obvious bias with which it was written.
Certainly given the nature of Marco Community Bank's situation, one would imagine that there would be a significant, on-going internal transformation that might involve any number of facets within their business. I daresay that the bank began to address their problems long before this 'newsflash'. It is only stands to reason that whatever necessary actions MCB has implemented into their business practices won't magically appear overnight. Writing a piece that encourages knee-jerk reactions from otherwise uninformed account holders serves no one except those hungry for hollow hype.
Pehaps a more interesting piece for the paper might be one that is written from the perspective of offering fair, accurate, and current information with the opportunity for both sides to be represented without undue editing or bias. I think that's a primary lesson in Journalism 101.
#9 Posted by globalglam on May 22, 2008 at 11:17 p.m. (Suggest removal)
DutchmanOnMarco, sharkfloss:
Unfortunately you are both correct. The Eagle has turned into a gossip column. It prefers salacious gossip over actual news-worthy articles. It has been this way for at least the past 2 years. At this point, they should really change their name to the Marco Enquirer.
#10 Posted by Rachael on May 23, 2008 at 8:51 a.m. (Suggest removal)
globalglam:
I'm not sure that any of the writers on the Eagle staff have taken Journalism 101... I have read articles in this paper written by close friends and the "facts" written in the articles were written with distorted facts and outright lies. It is obvious that the Eagle does not care about fact-checking and undue bias.
The good news is that they are losing readership and advertisers, so they will either shape up or will become irrelevant.
#11 Posted by Rachael on May 23, 2008 at 8:57 a.m. (Suggest removal)
Rachael – It is nice to see you take a free service that the Eagle offers and trash them. You seem to be a very negative person. There are some many people that only post negative things on this web site. It is like you get up in the morning and say “I am going to go try to find something to complain about”. Would it hurt you to try to give the Eagle credit for the good things they do.
#12 Posted by MarcoAvenger on May 23, 2008 at 10:36 a.m. (Suggest removal)
Come on folks....when facts are distorted to fit the slant of an article a correction of this distortion must be "Demanded" by the readership.
Another issue is at hand here. Who are these people who are delinquent on their obligations to the bank? Maybe they should do what they can to make things right. They borrowed the funds, used the funds, enjoyed the ability to leverage and now it is up to them to make good the best they can. All efforts should be made, on both sides of this obligation to work things out.
#13 Posted by sharkfloss on May 23, 2008 at 1:13 p.m. (Suggest removal)
Even their Senior Softball team was lousy!!
#14 Posted by hourigan82247 on May 23, 2008 at 2:57 p.m. (Suggest removal)
10 points Marco Avenger-0 Rachael Why don't you be more specific and point out what you know to be a lie?-- or are the only lies and misrepresentations those told by Rachael and Storm?
A local paper should not share info about the risks in my bank? If Rachael is so interested in journalism 101-- she should get out of banking.
Sharkfloss, if my bank was dumb enough to lend more money to the same people who had outstanding loan payments-- I don't feel sorry for them. You want people with savings accounts to take the same risks that got banks in this situation. Don't give your money to someone who may not be able to give it back. How about savings and loans 101
FYI Naples Daily News.com posted these bank ratings May 7.
#15 Posted by bycharlie on May 23, 2008 at 3:15 p.m. (Suggest removal)
MarcoAvenger: The paper is free, but that doesn't mean that it should be entitled to print lies and trash.
I am not complaining about a negative article written about a local bank. I am complaining about the obvious disregard to writing unbiased, factual NEWS stories. If you are calling it a NEWS story -- it shouldn't have a slant. Period.
You seem to have a pretty heavy bias yourself -- perhaps you are one of the writers for this paper in need of Journalism 101?
#16 Posted by Rachael on May 28, 2008 at 8:55 p.m. (Suggest removal)
byCharlie:
A local paper SHOULD share info and risks about what ever they deem necessary. The topic of discussion is not my issue. My complaint is that the information that the Eagle presents as “facts” is often times assumptions or water cooler gossip.
#17 Posted by Rachael on May 28, 2008 at 9:07 p.m. (Suggest removal)
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