By Becky Yerak | GreenChoice
Bank, an environmentally conscious lender that has been trying to get
off the ground in Chicago, plans to acquire the troubled Family Federal
Savings of Illinois, becoming the latest startup to buy an existing
institution rather than open its doors from scratch.
GreenChoice Holding Co. has filed an application with the Office of
Thrift Supervision for approval to acquire 100-year-old Family Federal,
recapitalize the institution and rebrand it as GreenChoice Bank.
Family Federal, which had the area’s fifth-highest Texas ratio as of Dec. 31, has locations in Cicero and Lockport. GreenChoice Bank will keep them.
GreenChoice Bank said it also plans to open its environmentally friendly flagship location later at Green Exchange, a green business community at Diversey Avenue and the Kennedy Expressway in Chicago.
GreenChoice Bank said it will try to make Family Federal’s operations more green. They plan to rebrand by third quarter. GreenChoice Bank expects to receive regulatory approval and close on the acquisition by the end of June.
The acquisition will give GreenChoice Bank its first physical presence since receiving OTS approval of its application for a new federal savings bank charter from the OTS in June 2009.
A Texas ratio tallies up a bank’s severely past-due real estate loans and foreclosed real estate and compares them with the bank’s core capital, typically shareholders’ equity, and money set aside for potential loan losses. When the result exceeds 100, the bank has serious troubles.
Family Federal’s Texas ratio was 387.
GreenChoice couldn’t be reached for immediate comment. Last June it told the Tribune that it hoped to raise $13.5 million to $16 million in capital.
It’s the latest de novo to regroup in a hostile banking environment.
Palos Hills-based Premier Commerce Bancorp, whose backers in 2008 announced plans to start a new lender in Downers Grove, recently decided to buy First National Bank of Grand Ridge more than 75 miles away, hoping to use it as a springboard for expanding into the Chicago area.
Premier said starting a “de novo,” as they’re called in the banking industry, was moving too slowly.
Just 20 new banks were launched in 2009, the fewest since the early ’90s as the savings and loan crisis wound down, according to SNL Financial, which tracks bank-industry data. In 2010 there have been no bank startups, SNL said.
Banking industry problems have led to heightened regulatory scrutiny and difficulty raising capital for de novo groups, so it’s more attractive for investors to purchase an existing institution as a platform for growth.
Last year, for example, more than 350 North Carolinians whose de novo efforts in the South were stymied invested $8 million into 88-year-old West Town Savings Bank in Cicero, hoping to use its charter to provide full-service banking operations in the Tarheel State.
GreenChoice expects to provide better terms for, say, a green builder, or a higher rate for consumers who opt out of receiving paper statements. The differential hasn’t been set.
It’ll also be pushing envelope-free ATMs and remote deposit capture, in which a business customer can deposit checks without visiting a bank.
