Syringa Bank, To Increase Capital and Reduce Classified Assets

Date : 09/24/2010 @ 5:52PM
Source : Business Wire
Stock : Syringa Bancorp (PN) (SGBP)
Quote : 0.007  0.0 (0.00%) @ 1:00AM

Syringa Bank, To Increase Capital and Reduce Classified Assets

Syringa Bancorp (PN) (USOTC:SGBP)
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Scott Gibson, President and Chief Executive Officer of Syringa Bank (“Syringa Bancorp”) (OTCBB:SGBP) announced today that Syringa Bank (“Bank”) has entered into an agreement with the FDIC and Idaho Department of Finance. The primary purpose of the agreement is to improve the financial strength of the Bank through raising additional capital and further reducing problem loans.

Mr. Gibson stated, “The current economic environment has impacted Syringa Bank’s level of provisions for non-performing loans and has resulted in sharp declines in the value of underlying commercial and residential real estate collateral. As the economy has continued to struggle to recover, Syringa Bancorp and Syringa Bank have done everything possible to reserve for potential losses by writing off non-performing loans. While such actions have negatively impacted capital, these actions have been critically important to Syringa Bank’s conservative outlook and establishment of a stronger bank for the future. The foregoing actions, in conjunction with raising additional capital, will poise Syringa Bank to take advantage of various opportunities as the economy strengthens and returns.” Mr. Gibson further stated “Many of the terms of the agreement largely reflect initiatives already underway by the Board of Directors and management of Syringa Bank. We are committed to devoting the necessary resources to resolve the issues identified in the agreement, make any prudent changes in Syringa Bank’s day-to-day operations, and work closely with the federal and state regulators to return Syringa Bank to financial strength and stability.”

With respect to Syringa Bancorp’s current capital raising efforts, Mr. Gibson stated, “Syringa Bancorp has engaged a capital and asset consulting firm to assist in the process of raising additional capital. Throughout this process, Syringa Bancorp has been working and will continue to work with various investors and potential investors to complete a private placement of capital.”

“The measures and strategic steps set forth in the agreement will allow us to quickly react to the ever-changing economy, continue to improve our ability to serve our depositors and borrowers, protect our shareholders, customers, and staff, and carry out Syringa Bank’s mission to operate a full-service, profitable, community bank by emphasizing customer service and focusing on the financial needs of small to medium-size businesses, professionals, and retail customers,” said Gibson.

Gavin Gee, Director of the Idaho Department of Finance, described such a regulatory agreement as a Consent Order. These agreements are entered into jointly by a bank and its regulators to determine best practices to address challenges. “We are pleased that Syringa Bank has already proactively responded to many of the issues raised in the Consent Order and we will continue to work closely with the Board of Directors and management going forward,” Director Gee said.

“We are committed to our customers and the communities we have the privilege to serve. We are very sensitive to the economic difficulties that exist in today’s financial environment and within the financial services industry. Amid these challenges, we want our customers and communities to be confident in our desire to assist in overcoming this economic turbulence. We want to assure our valued customers that their deposits are safe with us as they are FDIC insured up to $250,000. Additionally, non-interest bearing transaction accounts are fully guaranteed by the FDIC for an unlimited amount of coverage under the FDIC’s Transaction Account Guarantee Program (TAGP),” said Gibson.

Syringa Bancorp was organized in April 2005 as a holding company of Syringa Bank. The Bank was formed in 1996 and has since expanded to six branch locations and two mortgage offices, all within the state of Idaho. Syringa Bank is an Idaho state-chartered commercial bank.

Statements in this report regarding future events, performance or results are “forward-looking statements” within the meaning of the Private Litigation Reform Act of 1995 (“PSLRA”) and are made pursuant to the safe harbors of the PSLRA. Actual results could be materially different from those expressed or implied by the forward-looking statements. Factors that could cause results to differ include but are not limited to: general economic and banking business conditions, competitive conditions between banks and non-bank financial service providers, interest rate fluctuations, regulatory and accounting changes, risks related to construction and development, commercial real estate and consumer lending and other risks. Forward-looking statements are accurate only as of the date released, and we do not undertake any responsibility to update or revise any forward-looking statements to reflect subsequent events or circumstances.

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