Two companies serving Yelm are reportedly in deep financial trouble:
1. VENTURE BANK
“Federal regulators have ordered Venture Bank to raise more capital or find a buyer by next month because of concerns about its financial health.
In a letter dated Feb. 13 but disclosed on the Federal Deposit Insurance Corporation’s Web site Friday, the FDIC notified the bank that it has 60 days to raise more money, find a buyer or find a merger partner. The 60-day period ends April 14. Among the FDIC’s concerns were that:
The bank’s condition continues to deteriorate.
The bank’s management has not demonstrated the ability to return the bank to a safe and sound condition.
‘We are appealing this and take exception to their conclusions,’ Venture Bank President and Chief Executive Jim Arneson said Saturday. He declined to comment at length about the directive but said regulator concerns stem from investment losses the company reported in the third quarter of last year.
Venture Financial Group Inc., parent company of the bank, announced an after-tax loss of $26.1 million in the third quarter of last year that was linked to investment losses related to mortgage giants Freddie Mac and Fannie Mae. Although the company reported a $1.4 million profit in the fourth quarter last year, it still reported a full-year net loss of $21.4 million…
Mike Edwards, a former Federal Reserve adviser and founder of Thurston First Bank, took issue with the FDIC’s approach to dealing with Venture.
‘I’m disappointed to see the regulators have announced their concerns with the bank in a public fashion, dragging it through a prolonged public view,’ he said…
‘They were striving to do the right things and got caught in a very unusual circumstance,’ Edwards said,” quoting The Olympian.
2. FAIRPOINT COMMUNICATIONS
“Two major safety valves in the financial house of cards that is New England’s largest landline telecommunications service provider blew last week [March 11], leaving FairPoint Communications in a position of significant weakness, even as the company admits that its financial picture will worsen in the short term.
The North Carolina-based company, which bought Verizon’s northern New England operations last year, had always made questionable assumptions when arguing it had the financial wherewithal to do the deal.
Regulators at the Maine Public Utilities Commission and its counterparts in New Hampshire and Vermont were so concerned that when they approved the $2.3 billion deal, they specified several limitations intended to preserve FairPoint’s long-term financial stability.
But recent documents filed by FairPoint with state and federal regulators show that “stable” isn’t exactly the right word for its current status…
The picture gets worse. FairPoint is losing customers at a steeper-than-expected rate, which is, in turn, reducing its income. At the same time, FairPoint has warned federal regulators that its troubled transition to a new billing system which meant delays in sending out bills, leading to receiving payments later than projected could mean further cash shortages, even taking into account the suspended dividend,” quoting The Boston Phoenix.
The Boston Phoenix asked last Fall, “Will FairPoint run out of money?”
From the AP, CLICK HERE.