Welcome to the February 6 top secret, always confidential Monday Business Briefing.
These are biz tips Insider Louisville staff and contributors have collected during the past few days, some of which are NOT double-verified like Insider Louisville’s daily reporting.
But as we always say, these items are inside info from sources with direct knowledge of the deals:
• Multiple banking sources are confirming that PBI Bank, the third-largest Louisville-based bank ranked by deposits, is being shopped around by out-of-town investment bankers to healthy Louisville-based financial institutions.
What we’re hearing is, one of the healthy Louisville based banks such as Stock Yards, Republic or Commonwealth could become instantly bigger with acquisition of struggling PBI. (Republic just acquired a failed bank in Franklin, Tenn., giving it instant access to the Nashville market.) Bigger as in more deposits and more capacity to lend to businesses such as yours.
So far, there are no takers, and it’s little wonder.
PBI management managed their way to a $96 million loss for 2011. Because you’re doing a double-take, we’re going to repeat that … PBI lost almost $100 million of investors’ money. In one year.
As we’ve noted before, that has to a Kentucky record. The last few quarters have produced specatacular results:
- $45 million loss for the fourth quarter, 2011
- $12 million loss , Q3, 2011
- $37 million loss ,Q2, 2011
- $799,000 profit for the first quarter of 2011
- $4.4 million loss for all of 2010.
So, there you have it – about $108 million down the drain in two years, mostly due to big loans gone bad to commercial and residential real estate developers.
And if there is one sentence from their latest lack-of-earnings report that takes your breath, it’s this:
Non-performing assets increased to $110.3 million, or 7.53 percent of total assets, compared with $104.7 million, or 6.64 percent of total assets, at September 30, 2011.
This is not a record locally. Citizens Union Bank of Shelbyville’s non-accrual assets touched 12 percent for a while. But this still indicates PBI has another $100 million to write down. And when any bank reaches more than five percent of non performing assets, it’s on life support.
To be honest, banking stories do not spin the pageview meter at Insider Louisville, but they’re still important news you need to know about.
Moreover, PBI is one of four banks with significant Louisville presences – PBI, Citizens Union Bank of Shelbyville, American Founders Bank in Lexington and Town & Country Bank in Bardstown – that are running on fumes, and have been for years.
The reason we’re picking on PBI is that unbelievable amounts of money they’ve lost and their size make them a notable case of “don’t run your bank like this.”
That, and Business First has done a good job of staying on top of investor groups’ efforts to force PBI to fire top management, as well as to turn over the bank’s books, which the investors allege are cooked.
• Look for the expanding University of Louisville Physicians group to consolidate operations in another building. A group of U of L Physicians administrative staff are moving into a number of suites in the Landmark Building at 310 W. Liberty St., according to insiders. This will be the majority of the staffers who support the docs group, the largest group of physicians in the state, with about 600 affiliated doctors. The majority of the independent group’s physicians, who all teach and/or practice through U of L, practice out of the U of L Healthcare Outpatient Center at 401 E. Chestnut St. in the downtown medical complex. The administrative staffers plan to occupy space in the Landmark Building for the next 18 months, according to insiders.
• Our sources tell us Indatus, the telecommunications company that started out as Planet Telecom, has finally overcome a year’s worth of hurdles on the renovation of its future Main Street headquarters including issues with Metropolitan Sewer District. With permits in hand, look for a move to Louisville from New Albany by this summer.
• We got some more on the Earth Fare opening from Kristi Kanzig, the supermarket chain’s affable assistant marketing director.
The Ashville, N.C.-based chain of health-food only supermarkets plans to open its Louisville store at The Summit Louisville by this summer. Earth Fare will open in the former Old Navy Space on east side of the festival-market style shopping center by this summer.
We’d been told Earth Fare will open more than one Louisville-market store, possibly taking the Doll’s Market space on Brownsoboro Road. Kanzig declined to comment. So, we went back and looked at how many markets in which they have more than one store, and the total is zero. Oh, well.
• We don’t usually include info from news releases in the Monday Biz Briefings, but we think it’s notable Verizon Wireless is spending $38 million in 2012 to upgrade its network in Kentucky.
That includes the expansion of 4G LTE to Louisville and Lexington, covering eight universities and seminaries and numerous major sporting venues, according to a news release we got last week.
The company’s upgrades include:
· Adding new cell sites and upgrading equipment on existing cell sites to increase coverage and capacity of the company’s voice and data network;
· Installing permanent backup generators at cell sites to ensure the network remains up during times of crisis;
· And prepping the backbone of the network to deploy 4G LTE at urban and rural locations across the state;
From the release:
“The reliability of Verizon’s network is a vital key for not only businesses, research parks, start-ups and entrepreneurs, but also for consumers,” said John Granby, president–Kentucky/Indiana/Michigan Region, Verizon Wireless. “As Verizon continues to cover America with the blazing fast speeds 4G LTE offers, customers will depend on our network even more, thereby changing the face of how we do business and how we rely on wireless devices.”
Granby said the strategic investment will help major urban centers as well as innovative rural broadband communities across Kentucky to be front and center as they bid on new businesses and host events such as collegiate championship events, the Kentucky Derby and various other national and international equestrian competitions.
Since the company was formed in 2000, Verizon Wireless has invested more than $383 million on improvements to its network in Kentucky, according to the release.