Summit Bank, Prescott, Ariz., would be "an attractive acquisition" for a mortgage bank or Small Business Administration lender, the institution's president said.
The bank is for sale because of its real estate problems. A statement said it needs additional capital to meet a regulatory requirement because of losses due to weakness in the Prescott real estate market. It has had to take additional loan loss reserves and write down properties acquired in the past two years through foreclosures.
Bill Frank, who became president of privately-held Summit in July 2010, said, "even though the current weakness in the local real estate market is generally expected to be temporary, it is not feasible to postpone action until the expected real estate recovery is in full bloom."
The statement said Summit had a small profit in January, a sign that changes put in place when Frank took over are starting to have the desired effect. Summit has local deposits of $76 million.
Frank said Summit would be a good buy for either the non-banks listed above or another bank.
According to a Federal Deposit Insurance Corp. call report for the fourth quarter 2010, Summit lost $3.3 million. The report lists $3.5 million of REO.
"We have a valuable banking infrastructure that would be very costly to recreate and a brand that is well known in the area. Despite our recent problems, the acquisition of Summit will provide the acquirer with a reliable deposit base and a solid foundation upon which to build a profitable bank," Frank said.
Summit Bank has retained Bentley Associates, a New York-based investment banking firm, to assist it in finding a buyer.
