Let the dividends be paid

After almost two years, the downtown bank formerly known as Consolidated Bank & Trust finally has regulators off its back.

Consolidated, now known as Premier Bank, and its $1.1 billion West Virginia parent company announced Tuesday that the Federal Reserve had lifted the written agreement the bank had been under since July 2010.

The agreement was put in place after too many problem loans deteriorated Consolidated’s capital base. Consolidated was among a handful of local banks to enter into such agreements in the recession’s wake.

As parent to Consolidated, W.Va.-based Premier Financial Bancorp also was named in the agreement. It then devised the plan to merge and rebrand Consolidated and four of its other banks into Premier Bank, in part as a way to more quickly get out from under the agreement.

Consolidated and its lone branch at First and Marshall streets in Jackson Ward were consequently renamed the Consolidated Division of Premier Bank in April 2011. But the written agreement took some time to shake.

“It required further review even after we merged the banks,” said Bob Walker, chief executive of Premier Financial. The Fed wanted to make sure the plan that the company had devised for its new Premier Bank would still help it satisfy the requirements of the agreement.

“We met their expectations, and I certainly feel we’re a viable bank brand,” Walker said.

With the extra scrutiny gone, Walker said the company could get down to business and grow its new brand. The company had said from the outset that it would look to grow Premier Bank’s presence in some markets, including in Richmond.

“While you’re under additional regulatory scrutiny, you get internally focused and spend too much of your energy complying with those issues,” Walker said. “Now we’ll get busy thinking about expanding our footprint.”

Premier Financial’s shareholders should also feel some relief.

The written agreement prevented the company from paying dividends of any kind without first receiving permission from regulators. That’s a typical provision of such agreements, but Premier’s situation was fairly uncommon in that it remained a profitable bank holding company hindered by Consolidated’s past troubles.

The lifting of the agreement leaves the company free to regularly pay dividends to its regular shareholders and to the U.S. Treasury Department, which is owed $22.25 million as part of Premier’s participation in the TARP Capital Purchase Program.

On Monday, Premier was named among 12 banks whose TARP shares will be auctioned off by the Treasury. The auctions are part of a program the government has been pushing of late to unload TARP shares in banks that have been unable to buy their way out.

Glen Allen-based First Capital Bank was part of a similar auction in June. It was able to buy back its $10.9 million in TARP shares at the auction at an 8 percent discount.

The Consolidated Bank & Trust name has roots in Richmond dating back to 1903. Maggie Walker, the nation’s first female bank CEO, founded the bank as St. Luke Penny Savings Bank in 1903. Consolidated was also at one time known as the oldest continually African American-operated bank in the country.

After almost two years, the downtown bank formerly known as Consolidated Bank & Trust finally has regulators off its back.

Consolidated, now known as Premier Bank, and its $1.1 billion West Virginia parent company announced Tuesday that the Federal Reserve had lifted the written agreement the bank had been under since July 2010.

The agreement was put in place after too many problem loans deteriorated Consolidated’s capital base. Consolidated was among a handful of local banks to enter into such agreements in the recession’s wake.

As parent to Consolidated, W.Va.-based Premier Financial Bancorp also was named in the agreement. It then devised the plan to merge and rebrand Consolidated and four of its other banks into Premier Bank, in part as a way to more quickly get out from under the agreement.

Consolidated and its lone branch at First and Marshall streets in Jackson Ward were consequently renamed the Consolidated Division of Premier Bank in April 2011. But the written agreement took some time to shake.

“It required further review even after we merged the banks,” said Bob Walker, chief executive of Premier Financial. The Fed wanted to make sure the plan that the company had devised for its new Premier Bank would still help it satisfy the requirements of the agreement.

“We met their expectations, and I certainly feel we’re a viable bank brand,” Walker said.

With the extra scrutiny gone, Walker said the company could get down to business and grow its new brand. The company had said from the outset that it would look to grow Premier Bank’s presence in some markets, including in Richmond.

“While you’re under additional regulatory scrutiny, you get internally focused and spend too much of your energy complying with those issues,” Walker said. “Now we’ll get busy thinking about expanding our footprint.”

Premier Financial’s shareholders should also feel some relief.

The written agreement prevented the company from paying dividends of any kind without first receiving permission from regulators. That’s a typical provision of such agreements, but Premier’s situation was fairly uncommon in that it remained a profitable bank holding company hindered by Consolidated’s past troubles.

The lifting of the agreement leaves the company free to regularly pay dividends to its regular shareholders and to the U.S. Treasury Department, which is owed $22.25 million as part of Premier’s participation in the TARP Capital Purchase Program.

On Monday, Premier was named among 12 banks whose TARP shares will be auctioned off by the Treasury. The auctions are part of a program the government has been pushing of late to unload TARP shares in banks that have been unable to buy their way out.

Glen Allen-based First Capital Bank was part of a similar auction in June. It was able to buy back its $10.9 million in TARP shares at the auction at an 8 percent discount.

The Consolidated Bank & Trust name has roots in Richmond dating back to 1903. Maggie Walker, the nation’s first female bank CEO, founded the bank as St. Luke Penny Savings Bank in 1903. Consolidated was also at one time known as the oldest continually African American-operated bank in the country.

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Kim Rudisill
Kim Rudisill
10 years ago

The implication of the headline and the article is that somehow it was the government’s fault that the bank has been under intense scrutiny and subject to strict regulations (damn those government regulations and how they stifle businesses). And now that the bank has been able to shed those business killing regulators, the bank can go hog wild and build the business without having to focus on complying with all those business killing regulations and regulators. Well, the only reason those pesky regulators were there at all was because of all the bad loans the bank made in the first… Read more »

THEQ
THEQ
10 years ago

I am unaware of anyone affilliated with Consolidated Bank who has made those
whining arguments. It appears that Consolidated
drectors with the approval of its shareholders tok steps to address its issues within exisitng regulations.

If Premier and other successor institutions complaijn about regulators verbally assail them.

Roxanne
Roxanne
10 years ago

In most cases, the bad loans weren’t made but got that way with the deterioration of the businesses they were made to. If a company qualifies for a loan, a bank or other financial institution is there to loan them the money. had anyone had a crystal ball into this economic nightmare five years ago there are many things that many banks, business owners and government officiars would have done diffferently. Not every bank that was eligible for the TARP did so, though I know first hand that they were highly encouaged to do so, because they did not want… Read more »