Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, May 30, 1990 TAG: 9005300104
SECTION: BUSINESS PAGE: A5 EDITION: METRO
SOURCE: MAG POFF BUSINESS WRITER
DATELINE: LENGTH: Medium
The newspaper made a nationwide study of 13,121 banks based on information supplied to federal authorities for last year.
It found that 540 banks in 33 states failed one "key measure" of financial health. Their problem assets exceeded capital plus reserve for loan losses.
Bank of Shawsville had a ratio of 120.4 percent, according to USA Today. That means problem assets were higher than 100 percent of total capital.
The national average, according to USA Today, was 29.9 percent.
Bank of Shawsville also had a negative return on assets of 5.14 percent compared to the national average last year of a positive 0.47 percent.
Capital represented a positive 0.65 percent of assets. The national average was 6.31 percent.
Bank of Shawsville announced late last year that it had increased its reserve for potential loan losses to more than $2 million.
The bank also said its primary capital to assets ratio had fallen below the regulatory minimum.
Joseph Keesee, who became president of the bank last year, said he had not seen the USA Today article Tuesday.
Although he could not comment on the specific figures, Keesee said he did not necessarily dispute them.
Since then, he said, Bank of Shawsville has tightened its lending practices and is now operating in the black.
He said Bank of Shawsville's capital position had been "depleted" because of a series of bad loans. The bank charged off about $500,000 in loans, he said. The bank's capital is up about $75,000 over the last few months, he reported.
Keesee said no reports have been issued to stockholders or the media about fourth and first quarter earnings because the bank is still awaiting approval from federal authorities for its proposed affiliation with Premier Bankshares Corp.
The affiliation, if approved, will solve the bank's problems through recapitalization, Keesee said.
Stockholders will get a full report on finances and on the proposed affiliation in the same prospectus, he said.
He is hoping for approval by the Federal Reserve Bank and the Securities Exchange Commission in about a week. State regulators already have given their approval.
The loan loss reserve is about $1.8 million at this time, according to Keesee. He said he hopes the bank won't have to increase that amount.
The bank is taking steps to collect the loans, he said, including filing of suits and foreclosures.
by CNB