Showing posts with label United Bank of Philadelphia. Show all posts
Showing posts with label United Bank of Philadelphia. Show all posts

Thursday, October 2, 2008

Top Ten minority owned banks in the US

Below, we feel, are the best minority owned banks in the US (as of 6/30/08):

LIBERTY BANK & TRUST CO, New Orleans, LA (Black)
INDUSTRIAL BANK, Washington, DC (Black)
MECHANICS & FARMERS BANK, Durham, NC (Black)
CITIZENS SECURITY BK GQ INC, Guam, GU (Asian)
CENTRAL BANK OF KANSAS CITY, Kansas City, MO (Women)
BROADWAY FEDERAL BANK F S B, Los Angeles, CA, (Black)
BANCO SANTANDER PUERTO RICO, San Juan, PR (Hispanic)
UNITED BANK OF PHILADELPHIA, Philadelphia, PA, (Black)
CARVER STATE BANK, Savannah, GA, (Black)
NORTH MILWAUKEE STATE BANK, Milwaukee, WI (Black)

Yes, we know there are a lot of Black-owned banks on the list. Here's why:
Black banks have always had relatively higher levels of nonperforming loans, so they know better (than, say WAMU) how to survive with these types of loans on the books. We think this skill will serve them well in the current credit cycle. Thus, they are rated a little higher than other minority banks.

We think smaller banks will do well over this part of the credit cycle:
1. They should be able to gain deposits from the big guys.
2. They did not make a lot of subprime loans, so they should have relatively fewer loan defaults.
3. They did not buy a lot of CDO Swaps, or other derivative products.

One cautionary note: if a small bank gets in trouble, it will go down quickly (see: Douglass National Bank of Kansas City). Keep an eye out...(or ask us to do so for you...)

Thursday, April 10, 2008

United of Pennsylvania Gets FDIC Order

By Bonnie McGeer, American Banker | Wednesday, April 9, 2008

United Bank of Philadelphia must strengthen its management, board oversight, and loan policies under a cease-and-desist order that the Federal Deposit Insurance Corp. disclosed Tuesday.

The $75 million-asset African-American-owned bank has been operating with insufficient earnings and capital, according to the Jan. 23 order.

United posted a $1,000 fourth-quarter profit and reported a core capital leverage ratio of 9.99%, according to FDIC data.

The order also says the bank has been violating regulations on loans made to officers, directors, and shareholders, and engaging in unsafe banking practices.

It requires United to establish an adequate allowance for loan losses, enhance loan documentation, reduce delinquent loans, have an active audit committee made up solely of outside directors, cut expenses, and write a strategic plan for improving its earnings.

United, which had a ratio of noncurrent loans to loans of 4% at yearend, also must review its loan policies and procedures, particularly related to underwriting standards, the monitoring and reporting of problem loans, and controlling credit concentrations. The order specifically prohibits United from capitalizing loan interest to bring delinquent loans current.

Ken Thomas, a lecturer in finance at the University of Pennsylvania's Wharton School, said the order is unusually strong. "It is about a 7 out of 10 on the cease-and-desist-order Richter scale," Mr. Thomas said.

William Michael Cunningham, the president of Creative Investment Research Inc. in Washington, said United's troubles are likely related to its focus on small businesses, which have been hit hard by the economic downturn.

Evelyn F. Smalls, the bank's president and chief executive officer, did not return a phone call Tuesday.

Tuesday, January 29, 2008

FBI Probing 14 Companies in Subprime Lending Crisis

According to Bloomberg, "The Federal Bureau of Investigation is investigating 14 corporations for possible accounting fraud and other crimes related to the subprime lending crisis, officials said.

Neil Power, chief of the FBI's economic crimes unit, wouldn't identify the companies, though he said the cases involve 'valuation-type stuff.'"

We warned about these problems in 1991. In 2001, we worked to create the first investment vehicle designed to address subprime lending problems. Fraudulent valuation is a key component in predatory home mortgage lending.

A key question concerns the lack of early warning from the Federal Reserve Board's Consumer Advisory Council: "The Consumer Advisory Council was established in 1976 at the direction of the Congress to advise the Federal Reserve Board on the exercise of its duties under the Consumer Credit Protection Act and on other consumer-related matters.The council membership represents interests of consumers, communities, and the finance services industry." All three have been damaged in the subprime lending crisis. Most Council members appear to be industry insiders.

On a more positive note, The Federal Reserve Board on Monday announced the termination of the enforcement action against Black-owned United Bancshares, Inc., Philadelphia, Pennsylvania. Written Agreement dated February 23, 2000. Terminated January 22, 2008. United Bancshares, Inc. owns United Bank of Philadelphia.