New Resource Bank reaches stipulation with FDIC

San Francisco — New Resource Bank has entered into stipulation with the Federal Deposit Insurance Corporation (FDIC) and California Department of Financial Institutions (DFI) to undertake various corrective actions. The Bank believes that implementing these actions will enhance Bank operations.

The corrective actions are based on the state of the bank as of September 30, 2008 and includes a number of requirements, many of which the bank has already implemented including strengthening the management team, insuring the bank is well capitalized and has good liquidity and significantly reducing the number of underperforming loans.

“New Resource Bank opened in October 2006 as the first “green bank” in the United States with a focus on both business and personal banking to help promote green and sustainable resources. The founding organizers and initial shareholders brought together a blend of proven entrepreneurial leadership along with banking expertise and community leadership,” said Chairman Mark Finser. Currently, the bank has over $166 million in assets and serves over 2,000 clients.

“New Resource Bank currently has high levels of capital and liquidity,” said Vincent Siciliano, President and CEO. “Like many financial institutions, we are facing a challenging economic climate that resulted in under-performing loans in the real estate construction and development sector. We are working with borrowers to reduce our problem loan exposure and have made significant progress. New Resource Bank continues to actively serve our clients and customers as a bank with a mission to help promote green and sustainable resources.”

In cooperation with the FDIC and DFI, New Resource Bank has already accomplished a number of key enhancements. Specifically, the bank:

  • Raised nearly $15 million in a stock offering in September 2008, increasing the bank’s capital by more than 86 percent. As of March 31, 2009, the bank’s risk based capital ratio was 18.97%—almost double the regulatory definition of a well-capitalized bank of 10 %.
  • Reduced underperforming loans from a high of $24.7 million in October 2008 to $15.4 million as of March 31, 2009
  • Maintains a level of liquidity well above the industry average for lending institutions. As of March 31, 2009 the bank has 33.9% of its assets in liquid
  • resources
  • Added to its management strength with the hiring of Vincent Siciliano as Chief Executive Officer, Bill Peterson as Chief Credit Officer and Charmaine Detweiler as Chief Financial Officer
  • The Board of Directors of New Resource Bank elected Mark Finser as the new
  • Chairman of the Board. Mark has 25 years experience in Social Finance and an outstanding track record of sustainable lending and investing.

The net effect of these actions will strengthen lending functions and policies, increase collections on underperforming loans, enhance planning for liquidity and capital maintenance and institute additional oversight by the Board of Directors. The enhancements are designed to bolster the Bank’s safety and soundness while New Resource Bank serves its mission as a banking institution focusing on supporting green and sustainable enterprises. The key remaining task is to continue to reduce underperforming loans while maintaining strong liquidity and capital.

“New Resource Bank is recognized by community stakeholders for our commitment and leadership in financing sustainability,” said Peter Liu, Founder and Vice Chairman. “Our strong and supportive shareholder and client base is a wonderful testament to our service.”

New Resource Bank received a “Reader’s Choice Award” by San Francisco Magazine in 2008 and this April won both the U.S. Environmental Protection Agency’s Environmental Award and recognition from The American Institute of Architects and Mayor Newsom as “San Francisco’s Greenest” for their LEED-Gold CI branch.

This release contains forward-looking statements, such as statements about certain plans, expectations, goals, and projections which are subject to numerous risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in California, the adequacy of the Bank’s allowance for loan losses, and other factors beyond the Bank’s control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire years to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

 

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