Tag Archives: financial

Regulators close Memphis bank

NEW YORK (AP) — Regulators are closing a small Tennessee bank, marking the second failure of a federally insured bank this year.

The Federal Deposit Insurance Corp. said that Trust Co. Bank of Memphis, Tennessee, was closed Friday,

As of Dec. 31, Trust Co. Bank had about $20.7 million in total assets and $20.3 million in total deposits. It operated four branches.

The Bank of Fayette County of Piperton, Tennessee, agreed to buy about $3.9 million of the failed bank’s assets and assume all of its deposits.

The failure is expected to cost the FDIC $7.2 million.
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Note: News release from the Tennessee Department of Financial Institutions is below. Continue reading →

Haslam and friend Nesbitt formed Hasbitt to hold Florida condos valued at $4 million

Gov. Bill Haslam and an Alabama pain doctor, who are longtime friends, own two Florida seaside condominiums valued at some $4 million, reports The Tennessean after reviewing public records and a recently filed ethics disclosure statement.

The condos, which were purchased in 2008 for a combined total of $3.9 million, are rental properties, according to David Smith, a Haslam spokesman.

The condos are held in the name of two separate companies, Hasbitt II and Hasbitt III, both incorporated in Florida. Smith said there was no Hasbitt I. One of the condos, at 2,617 square feet, was purchased for $2.6 million. The second, at 1,573 square feet, went for $1.3 million.

Smith noted that the governor has disclosed his interest in those two entities since 2008, but just what the companies own has not been previously disclosed.
The condos are in a development called Lyceum Gateway in Santa Rosa Beach. The governor’s friend and partner is Dr. Robert W. Nesbitt, who runs a pain and anesthesiology practice in Alabama.

Recently released data from the Centers for Medicare and Medicaid Services show Nesbitt billed Medicare for $1.56 million in 2012 and collected $164,870. That put him in the top 5 percent of doctors in his specialty, anesthesiology.

…Smith said that since Haslam has placed most of his other assets in a blind trust he does not personally know what the trust owns.

A glimpse of those assets, however, can be found in Securities and Exchange Commission records.

Filings for a California company, William Lyon Homes, show that Haslam’s blind trust owned 161,330 shares in the company when the housing firm was making a public offering. The trust was listed as one of the sellers. The trust does not appear in any filings after April 2, 2013.

Smith said Haslam doesn’t know about William Lyon Homes or any of the trust’s other holdings.
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Note: The governor’s most recently-filed financial disclosure is HERE.

Haslam Sees Financial Woes in Losing UT Football Program

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Gov. Bill Haslam tells the Chattanooga TFP that the University of Tennessee’s football team can’t continue down the road followed during the past season or two.
“They can’t be average, and you hate to say it that way, but financially it just doesn’t work,” Haslam said Thursday afternoon. “They have to fill that stadium up. They get the benefit of being a part of the SEC and all the TV money that comes with that, but at the end of the day, if they can’t fill that stadium up and sell concessions, then not just the football program but all the other sports that benefit from a strong football program suffer.”
The Volunteers, who not long ago racked up 10-win seasons and New Year’s Day bowl invitations with great regularity, are just 28-34 the past five years and 12-28 in league play. Tennessee has its fourth head coach since 2008, and a report this week in the SportsBusiness Journal detailed the athletic department’s financial woes.
Tennessee is carrying more than $200 million of debt, according to the article, which is not unlike recent debt figures at Alabama and LSU. Yet Tennessee’s reserves are just $1.95 million, whereas most every other SEC institution has reserves between $50 million and $100 million.
The SportsBusiness Journal reported that Tennessee’s athletic department spends $21 million annually on debt payments, $13.5 million of which comes from the university’s stressed $99.5 million athletic budget and the rest from donations. Athletic director Dave Hart was quoted as saying, “We’ve got to get football healthy.”
“If you want to be bottom line about it, it shows why UT-Knoxville has to be good in football,” Haslam said. “You have a whole program that’s set up with a 100,000-seat Neyland Stadium, and it’s a program that supports all the other sports other than basketball and provides scholarships back to the university.”
This past football season, the Vols lost their first seven conference games for the first time in program history, which included a third consecutive 31-point setback against longtime rival Alabama. Attendance dropped sharply after the loss to the Crimson Tide, and the Vols wound up averaging 89,965 fans per home game.
It was the lowest season average for Tennessee since 1979, when Neyland had a capacity of 80,250.

Gov Speaks on Financial Illiteracy

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Tennessee ranks 47th in the nation for financial literacy, according to the Jumpstart Coalition for Personal Financial Literacy — a problem Gov. Bill Haslam says needs to be turned around to build a more effective workforce.
From TNReport:
“If people can learn not to be afraid of numbers early and not to be afraid of understanding the finances, they’ll be a much more productive employee,” Haslam told reporters Thursday after addressing elementary teachers at a summit sponsored by the Tennessee Financial Literacy Commission.
“Obviously the challenge for our school systems is, given everything else we want them to do with also helping increase health habits, increase math and reading scores, they’ve got a lot of balls to juggle,” he said.
The day-long conference in Nashville included workshops about how to teach students to be financially fit, save for college and a home and outsmart scammers — topics Tennesseans struggle with compared to other states.

State Regulators Take Over BankEast of Knoxville

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News release from state Department of Financial Institutions:
NASHVILLE – The Tennessee Department of Financial Institutions (“Department”) took possession of BankEast, Knoxville, Tennessee at 6:00 p.m. EST on January 27, 2012. The Department has appointed the Federal Deposit Insurance Corporation (“FDIC”) as Receiver of the Bank effective upon the Department taking possession of BankEast.
The Department took possession of BankEast due to BankEast’s impaired capital, unsound condition and the bank’s inability to continue normal operations.
Through an agreement with the FDIC, all deposit accounts of BankEast have been transferred to U. S. Bank National Association and will be available immediately. Depositors of BankEast will automatically become depositors of U. S. Bank National Association. Depositors will be able to access their accounts at the former main office and branch locations of BankEast during regular business hours. Customers of both banks should continue to use their existing branches until U. S. Bank National Association can fully integrate the deposit records of BankEast. Additionally, the former depositors of BankEast can continue to access their accounts through automated teller machine transactions, checks and debit transactions.
Since all deposits transferred to U. S. Bank National Association there will be no loss exposure to former customers of BankEast. The FDIC has established a website and a toll-free phone number to answer questions from depositors, creditors and other interested parties regarding the receivership of BankEast. Please refer to the FDIC’s website at http://www.fdic.gov/bank/individual/failed/bankeast.html for further information regarding the details of the transaction. The toll-free number is 1-800-517-1839. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; on Monday from 8 a.m. to 8 p.m., EST; and thereafter from 9:00 a.m. to 5:00 p.m., EST.
The Department’s Commissioner, Greg Gonzales, reminds depositors that deposits for all Tennessee banks are insured by the FDIC up to $250,000. Special rules are in place for accounts held in trust status and joint accounts that may further expand deposit insurance coverage. Additional information on FDIC Deposit Insurance may be found at www.fdic.gov.

Stewart Bill Targets TARP Takers

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State Rep. Mike Stewart has filed legislation that would prohibit state-level political contributions by large financial institutions that received federal bailout funds and loosen some rules on filing lawsuits against them in Tennessee courts.
The Nashville Democrat said the “Main Street Recovery and Wall Street Accountability Act of 2012” targets “too-big-to-fail” institutions — those that received federal aid through the Troubled Asset Relief Program and have assets of more than $100 billion. That would include corporations such as Citigroup and Bank of America, but not smaller banks, he said at a news conference last week atop the Legislative Plaza with “Occupy Nashville” protesters encamped behind him.
While oversight of such mammoth financial institutions is primarily a federal matter, he said, there are things that state legislatures can do and his bill is a starting point. The measure — HB2224 — also calls for a study committee to consider other possibilities, including whether Wall Street executives could be prosecuted in state courts for actions impacting Tennessee investments and whether the state could impose new regulations on such institutions.
Stewart said TARP allowed the “too-big-to-fail” banks to “socialize the risk” from their bad investment practices and, at the same time, “privatize the profits.”
The ban on political donations by such companies, through political action committees or directly as allowed by state law, is appropriate, he said. Otherwise, he said, the institutions will effectively “take bailout money and use it to influence the political system.”
The bill also extends the period that Tennesseans can file lawsuits for recovery of funds lost through the institutions’ actions rather than have them cut off by the “statute of limitations.” The institutions financial maneuvering were so complicated that extra time is needed to figure them out and file lawsuits, he said.
“Banks shouldn’t be allowed to hide behind the complexity of these financial transactions,” he said.
Stewart said he is hopeful that some Republicans will join him in pushing the legislation, since TARP meant that they are “not working in the free market system” that many Republicans support.
“Thanks to citizen protests like the Occupy Wall Street movement, people are focused on the continuing threat to our economy posted by financial institutions that are so large that they can reap profits from risky investments when things go well, yet expect to be bailed out again and again by the taxpayers whenever things go poorly,” Stewart said

State Gets Award for Financial Reporting

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NASHVILLE, Tenn. (AP) — The state has been honored for its budget and financial reporting.
The Government Finance Officers Association recognized the state for both its annual budget document and the financial report that closes each fiscal year. Both are produced in the Department of Finance and Administration, which manages the state’s budget and also is responsible for accounting practices in all state agencies.
The association awarded the state its Distinguished Budget Presentation Award and its Certificate of Achievement for Excellence in Financial Reporting. The state has received these awards multiple times previously.

AG Cooper Working With Counterparts, Feds on Financial Fraud

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State attorneys general have gathered in Washington this week, reports the Chattanooga TFP, for a round of collaborating with their counterparts from across the country, exchanging ideas with Justice Department officials, and hearing an earful from angry citizens.
As the conference got under way a group of sign-waving protesters crowded outside the downtown hotel where the AG’s are meeting, demanding criminal charges be brought against bankers who helped fan the subprime mortgage crisis.
Attorneys general from all 50 states are collectively investigating banks over their subprime lending practices, but they haven’t announced any plans to criminally prosecute bankers.
…Some reports have leaked that AGs are offering the banks a settlement of $20 billion. Members of the crowd said that amount is too low, and the AGs refused to comment on the report.
“Obviously there are a lot of people frustrated about the situation in the housing market. It continues to be a problem,” said Tennessee’s top prosecutor, Robert E. Cooper Jr.
He said he’s committed to investigating wrongdoing by the nation’s largest financial firms, but he wouldn’t say if he thought criminal charges were warranted.
In the wake of the economic slump, Cooper said one of the most important areas where his office is working with federal officials is on financial fraud.
“Because of the financial downturn we’ve seen more of that,” he said. “Ponzi schemes rely on good times to keep going and when the economy takes a downturn, then those tend to get exposed.”

The Four Freshmen Disclose Personal Finances

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Personal financial disclosure filings from congressmen were due Wednesday – the first such annual filing by Tennessee’s four freshmen as members the U.S. House of Representatives (though they had a filing as candidates). Here’s a rundown on some of the reporting.
Black Reports $16.5 Million in Assets
First-term Republican Rep. Diane Black is the wealthiest member of Tennessee’s congressional delegation, according to the Daily News Journal after a review of her personal financial disclosure form.
(Congress members) must list assets worth more than $1,000, excluding private homes, but values are reported in such wide ranges that it is impossible to determine exactly how much a member of Congress is worth. Black and her husband, David, listed assets totaling at least $16.5 million.
The Blacks’ largest asset is their interest in Aegis Sciences Corp., the Nashville forensic chemical and drug-testing laboratory that David Black founded. They sold between $25 million and $50 million in company assets in 2010 and bought between $5 million and $25 million.
That sale explains why Black’s assets appear to have dropped since 2009, said her spokeswoman, Stephanie Genco. Black’s 2009 disclosure statement showed assets of at least $33.8 million and placed her among the wealthiest members of Congress.
Fincher Clarifies Farm Finances
Freshman Rep. Stephen Fincher, who was elected despite some controversy over his personal finances, has clarified the value of his family farm and his debts, reports The Tennessean.
Fincher’s 2010 personal financial disclosure form, released Wednesday, lists Stephen and Lynn Fincher Farms as the Frog Jump, Tenn., Republican’s only asset, worth between $500,000 and $1 million. Farm income amounted to $103,882 in 2010, according to the form.
His previous statement, in 2009, reported no assets and about $60,000 in income, raising questions as to how the farmer and gospel singer was able to lend his campaign $250,000 last year. That led to a Federal Election Commission investigation, which is pending.
Fincher’s new report also listed between $1.1 million and $2.5 million in liabilities, mostly for loans on farm equipment. His 2009 report listed no liabilities. Fincher’s campaign lawyer, Eliot Berke, called the omissions on the 2009 report an “honest misunderstanding” of the reporting requirements for businesses. He said Fincher submitted amendments to that report when he filed his 2010 statement.
Fleishmann Makes Millionaire’s Club
Despite spending nearly $700,000 of his own money to help win his congressional race last year, Republican U.S. Rep. Chuck Fleischmann, of Chattanooga, still had enough assets to qualify him for Congress’ millionaires’ club, reports the Chattanooga TFP.
In personal financial disclosures for 2010…the 3rd Congressional District freshman lawmaker reported assets of between $1.66 million to $3.41 million. He reported no liabilities.
Fleischmann, an attorney, disclosed holdings including an interest in his and his wife’s law firm, Fleischmann & Fleischmann. He valued his interest at between $50,001 to $100,000. He also reported $163,144 last year in income from the law firm. As a congressman, he now makes $174,000 annually but cannot continue to practice law. Spouses are required to list income sources but not amounts.
…Among the assets he listed was between $500,001 to $1 million invested with “Wells Fargo Investments.” His annual disclosure listed income of between $15,001 to $50,000 in dividends, interest and capital gains from the sale of part of the investment, which was unspecified.
He reported total unearned income such as interest, dividends and sales for all holdings at between $28,705 to $83,500.
DesJarlais Less Than $1 Million in Assets
U.S. Rep. Scott DesJarlais, of Jasper, reported assets of between $403,009 to $945,000 last year. (From the same Action Andy’s report in the Chattanooga TFP covering Fleishmann.)
The 4th Congressional District lawmaker, who is a physician, says in his disclosure that he earned $148,905 from his practice and had unearned income such as interest as well dividends and other income of between $5,002 to $15,200.
He valued his medical practice at between $100,001 to $250,000. He owns a commercial lot in South Pittsburg, Tenn., valued at between $50,000 to $100,000. He had two Pacific Life annuities valued at between $50,000 to $100,000 each.
DesJarlais reported selling two stock funds with Morgan Stanley during last year’s GOP primary at a loss.
His liabilities were pegged at $95,004 to $250,000. Among other debts, he owes between $15,001 to $50,000 on his Bank of America Mastercard. He has a business line of credit at $15,001 to $50,000 with First Southern Bank of Scottsboro, Ala.
DesJarlais spokesman Robert Jameson did not respond to request for information about the congressman’s net worth nor whether he had sold his doctor’s practice.