Horizon Bank and the fate of Fairhaven Highlands
Preservationists worry that the character of Bellingham's historic neighborhood rides on the FDIC's willingness to enforce its own order restricting a controversial development.
The City of Bellingham may approve a huge hillside subdivision at the south edge of town, but the Federal Deposit Insurance Corporation will decide whether or not it gets built. Maybe that's not the way the FDIC would like it phrased, but that's the way it comes off in a recent letter from the agency's legal counsel. It adds a strange twist to a Bellingham development battle that was already strange enough.
Critics claim the development would change the character of Bellingham like nothing has since Henry Roeder and Russell Peabody paddled up from Portland in 1852 and started cutting trees. Almost 800 dwellings would occupy what is now a soggy, forested hillside connected to the rest of the city by a two-lane road and a narrow, 77-year old bridge. Current plans say 181 single-family homes and 558 apartment and condominium units would rise above the ridge, which itself rises above everything else in the historic district of Fairhaven.
Locally owned Horizon Bank would finance the project through its subsidiary, Westward Financial Services, in partnership with local developer David Edelstein. But viewed from a certain angle, it looks as though the FDIC, whose job is to prevent bankers from venturing into wild financial territory and to protect our deposits when the bankers go there anyway, will control the future of Bellingham's scenic backdrop. Not to mention the destiny of old trees, wetlands, birds, and small four-footed critters.
A classic neighbor-vs.-developer battle has grown around the wild 85 acres the developers call Fairhaven Highlands and that Bellinghamsters know, affectionately, as Hundred Acre Wood. The opponents, organized as Citizens for Responsible Development, recruited professional biologists, foresters, and geologists, and hired Seattle land-use attorney David Bricklin to fight the project on legal and environmental grounds.
They're also targeting Horizon Bank for its role in financing the proposal. Responsible Development published an "open letter" from 850 citizens urging Horizon to end its involvement. One family-owned business announced plans to cancel more than $3 million worth of borrowing and deposits.
Horizon Bank officials did not return repeated calls requesting comment on the Fairhaven Highlands proposal and the public reaction. But it's clear that the customer criticism and retribution come at a tough time for Horizon. It's No. 40 out of more than 100 "undercapitalized" banks on a list generated by the FDIC and made public on the financial news website TheStreet.com. Last March the FDIC imposed severe restrictions on Horizon, telling it to raise new capital, cut back its land development lending, and get its board of directors more engaged in the banking business.
As early as 1994, the FDIC issued a "cease and desist" order, telling Horizon Bank to stay away from multifamily housing development. The federal regulators apparently find apartment and condo speculation to be something you don't want to be deeply into when it looks like you might run short of money.
The language of the order is straightforward. It allows Horizon to continue bankrolling residential development only on the condition "that activities be limited to the development of real estate intended for single-family residential use" (emphasis added).
But in the upper left-hand corner by the Bay, the federal directive didn't change a thing. The city of Bellingham accepted the developer's Fairhaven Highlands draft environmental impact statement, and the approval process is underway. Sure enough, the draft EIS describes a development that's about four-to-one multifamily.
Opponents tossed the FDIC order into the public debate on Tuesday, at a packed hearing on the environmental consequences of Fairhaven Highlands. Attorney Mike Botwin, an outspoken critic of the development, charged that the city of Bellingham is in danger of "aiding and abetting" Horizon Bank in disobeying a federal order. Botwin says the environmental impact statement, even the Tuesday hearing itself, amounts to helping the bank flout the orders of a federal agency.
If this federal agency feels flouted, however, it's keeping its feelings to itself. FDIC counsel James Miller says in a July 15 letter (PDF) to an opponent of the project, Dr. Robert Gibb of Bellingham, that the order is still in effect, and that the bank "has not been found to have violated any of the four conditions of the order to the present time." Not even FDIC's "condition No. 2," the one that says the bank can't invest in the kind of housing the bank plans proposes at Fairhaven Highlands.
However, Miller wrote, "The FDIC will continue to closely monitor the progress of the proposal ... to ensure that the units that may be ultimately approved by the city of Bellingham for construction on the site are, in fact, intended for single-family residential use and that the bank remains in compliance with condition No. 2" (emphasis added).
This conjures up the shadow of the FDIC reaching into Bellingham's Department of Planning, tapping Director Tim Stewart on the shoulder, frowning, clearing its throat, shaking its head. Not likely. Miller was not available to explain his letter, but FDIC spokeswoman Lujuan Williams-Dickerson told Crosscut, "We could never get involved in telling a local government what it can or cannot approve. Our only authority is with the bank. If the bank is in noncompliance with our order, then we can prevent the bank from going ahead."
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Comments:
Posted Mon, Oct 26, 8:55 a.m. inappropriate
Mr. Simmons,
Thank you. Thank you for taking time to write about Horizon Bank’s eagerness to adversely impact the quality of life in south Bellingham, where many of its (former) customers reside. How stupid can a community bank be? And they wonder why every good account has fled this sinking ship!
To clarify for your readers, Horizon Bank is the actual developer of this project and owns 50% of the land. It is not simply financing the project. Additionally, the 1994 FDIC Order is not a “cease & desist” order, per se. Instead, it approves Horizon Bank’s application to develop - rather than simply finance – it own real estate projects, subject to four conditions designed to minimize risk. One of these conditions limits Horizon’s development activities to “single-family” residential. As you clearly point out, the “multi-family” Fairhaven Highlands project on Chuckanut Ridge (aka, the Hundred Acre Wood) violates this condition. Another condition limits the bank’s investment in real estate development to 25% of its Tier 1 capital. As of June 30, 2009, the bank’s investment in this project consumes 60% of its Tier 1 capital, another violation of the 1994 FDIC Order.
It’s not surprising that Horizon Bank refused your repeated attempts to comment on this project. Really, what positive spin could they impart on this sorry state of affairs. Still, their refusal to comment says more about the bank and this situation than any “actual” comment they might make. They tend to favor the “sticking my head in the sand” approach. Note to Horizon: That approach is not working.
Your statement that the approval process is underway may lead readers to believe the process will be a rapid one. It won’t. The EIS process alone will consume another five months, or more. Then the Planning Commission will hold a public hearing before permits can be issued. I give the process another nine months or so. The real question is: Will Horizon still be around to pick up (and pay for) its permits?
The permit itself is just a game – the bank’s attempt to recover some of the land’s lost value. The bank does not have the wherewithal to actually move forward with the project. Reminds me of a bank I once used in North Carolina – NCNB. We always thought its acronym meant, “No Cash, No Brains.” Seems fitting in this situation.
Posted Mon, Oct 26, 9:54 a.m. inappropriate
It’s sad to learn that Fairhaven’s unique character may be sacrificed to such a reckless and inappropriate development. Having said that, several important questions must be asked: First, how did this proposal get as far as it did? And second, is this project being proposed under existing development regulations, or is the developer asking for changes?
The last poster made a comment that illuminates and important point; “The permit itself is just a game – the bank’s attempt to recover some of the land’s lost value.” The fact is that if the city approves this project it will eventually get built in some form by someone irrespective of the bank’s involvement.
Posted Mon, Oct 26, 10:16 a.m. inappropriate
bjohn,
You asked, "how did this proposal get as far as it did?"
Those who oppose the project are also scratching our head over that question. The best answer likely involves the city's willingness to look the other way more often than you can imagine. You see, for more than 30 years, the city has been trying to figure out how to fix a severe transportation limitation south of Fairhaven. The "Ridge" and a creek cut off the most southern portion of the city from the rest.
In 1980, the city "paid-off" the previous landowners by gifting them an upzone - representing an almost 700% increase in density - in exchange for the construction of a connector road over-and-through the steep and landslide-prone slopes of the Ridge, as well as several Category 1 wetlands. All idiotic. All illegal. Hey, who cared in 1980, right?
All city administrations since have done all they could to keep this idiotic and illegal plan intact. Can you spell I-N-T-E-G-R-I-T-Y ? Seems city officials are having a tough time.
Thought I cannot answer your question directly, I hope this adds some context.
Regarding the permit, it's really fools gold. Even if the city approves some form of development (most likely with severe conditions), the FDIC is on record that they will not allow the bank to acquire it. So it will just sit there collecting dust, of no use to anyone. The bank cannot sell its permit to another entity if it cannot acquire the permit itself, any more than you can sell a home you don't own.
Posted Mon, Oct 26, 10:33 a.m. inappropriate
bjohn,
Didn’t mean to overlook your 2nd question re: “Is this project being proposed under existing development regulations, or is the developer asking for changes?”
The simple is answer is: The developer’s application has requested several – mostly minor – variances.
A more complex answer relates to the significant issue of vesting. The project has not been submitted under “current” development regulations, which have included for four years the city’s 2005 Critical Areas Ordinance (CAO). The developer claims vested status under prior law, before the city even had a CAO.
There are serious problems with the developer’s claim of having vested rights. If you are interested, I’ve provided a link to an article on the vesting below. I have also provided a link to another article on the FDIC angle.
More importantly, the application violates even the old laws that the developer claims it is vested in. If there is any semblance of integrity, this application must be denied on its face.
Links to articles:
FDIC angle:
http://www.nwcitizen.us/entry/hope-for-chuckanut-ridge
Vesting:
http://www.nwcitizen.us/entry/divesting-fairhaven-highlands
Posted Mon, Oct 26, 11:40 a.m. inappropriate
Thanks for the links.
A complicated mess to be sure! While I don’t live in Bellingham I have had the pleasure of visiting the city on many occasions and it is my sincere hope that the citizens of Bellingham are able to stop or substantially alter this project, since its approval would set a horrible precedent, not only for the city of Bellingham, but for the Northwest as a whole.
Beyond the problems and conflicts identified in these articles there are numerous problems with this development proposal. For one thing given the current market conditions it is difficult to see how any developer, let alone a financially troubled one could move forward with this project and obtain construction financing, let alone dispose of 700 – 800 multi family units in a city like Bellingham. Furthermore, even if this project were to precede to completion the resulting saturation of the multi family market would likely make other multi family projects financially unfeasible, a condition which would seriously hamper Bellingham’s ability to promote redevelopment and infill.
Having driven by the site of the proposed development on numerous occasions, I can say quite confidently that the level density proposed by the developer is completely inappropriate, especially given the number of abandoned/underdeveloped sites located elsewhere in the city.
Posted Mon, Oct 26, 11:47 a.m. inappropriate
bjohn,
Couldn't agree with you more.
No way is there a market for this project. There was an article in yesterday's paper about banks foreclosing on unsold condo projects in Bellingham. Like I said, it's the permit they're after, not the project. Of course, they cannot even get the permit. What a waste of time and money.
Posted Mon, Oct 26, 1:23 p.m. inappropriate
FYI,
The Street.com list of "Undercapitalized Banks" referenced in the article is sorted by state (not a very useful sort).
The same data, which shows the worst banks as of Aug 21 (based on June 30 financial info) but sorted by "Worst Capital Ratio" can be viewed at:
http://nwcitizen.us/documents//Undercapitalized%20Banks%206-30-09.pdf
Horizon Bank is 40th on the list. 14 of the worst 40 were closed since Aug 21.
Posted Mon, Oct 26, 3:02 p.m. inappropriate
This is a story about how a big small-town bank can buy all the politicians and favor they need to conspire to extort millions in phantom value from the taxpayers.
In 1981 the property was rezoned, without notice or hearing, or consistency with area or city plans, policies, goals or objectives. There is no public record of any normal proceedings. The only record, the minutes of a planning commission hearing, indicate staff wanted it rezoned to make developing the property economically feasible with a roadway they felt was necessary. That is an illegal basis for zoning.
It wasn't until 1995, when then owners announced their first plan, that citizens found out about the rezone. A senior city planner reviewed the record and called the rezone, "a mystery at best". What might constitute the worst has never been investigated. Citizens rallied against the project, stalling it long enough for some heat to drop out of the housing market.
Between the obvious environmental consequences and the "mysterious" character of the rezone, the city should have felt a duty to review this potential zoning error. They didn't, instead readopting the zoning, again without notice, review or hearing, embedded in the comprehensive plan update as a whole.
The owner then supposedly sold the property and the supposed "new" owners recommenced the project when the housing market recovered. Of course, the same old attorney remains at the helm. To many it has all the earmarks of the same old cabal pulling the same old stunts with all the influence they can muster and money can buy - even back to the blind Delaware corporation that originally consolidated the land.
Lucky 7 is correct. Many things the city should have done that would have limited the damage from this project never happened, even at the risk of state sanctions. Many things the city should never have done that preserved the project's intensity happened expeditiously. The history of the project is either a comedy of errors and unbelievable incompetence, or worse - an organized attempt to rip off the taxpayers of Bellingham.
Lucky 7 is correct again. Horizon Bank cannot build it. No one could build it. It's impossible. It's a joke. A bad joke. Horizon Bank is threatening the city and residents with a nightmarish tragedy in order to blackmail a local parks and trails levy out of five times the property's value. Last publicly appraised at $3 million, they claim to have paid $14 million and racked up several million more in costs, mainly for a bogus environmental review. They would consider selling for $20+ million, but are quick to add that the price is increasing with every expense. The blackmail is many fold since an economic impact analysis showed that building the project would cost taxpayers $12 million. Then there are the outrageous environmental costs that threaten two salmon streams and acres of publicly owned wetlands.
Indeed, if they really wanted to develop, they could have long ago built fifty to 100 high-end, single-family woodland lots, sold them into the top of the market and made all their money without incurring all the intense environmental scrutiny or assuming unimaginable development costs.
The truth is that the project is a sham. They will squeeze the dough out of the public or sell their entitlements to some development investor on the basis of its proximity and density, ignoring the sixteen wetlands of muck that prevent anything of the sort. In other words, they are dead set on taking someone to the cleaners. What a bank!
Having fought this development for a couple decades, having run out of confidence in our planning system, having wasted untold hours reviewing public records and reports, I am fed up.
I say approve the damn thing, but with a few provisions. First, state at the outset that, following environmental review, the zoning seems inappropriate and may need correction. Undo the three transportation concurrency carve-outs that let this project off the hook for necessary circulation improvements. Let Horizon Bank demonstrate they have the wherewithal and legal authority to develop the project before it is approved. Then, approve the project and give them one year to fulfill their preliminary plat requirements. Forget all the fancy phasing BS designed to allow the bank to pussyfoot around their teetering finances and stretch environmental damages out over many years. Make sure that downstream environmental features are comprehensively inventoried so that any potential buyer understands that natural resource damages are a long-term liability. Put any other limitations possible on the transfer of the entitlements. Finally, after the Bank fails to perform, complete the zoning review that was never done and apply a land use designation that makes sense.
The FDIC is hamstrung. They want the bank to succeed. Enforcing their order would additionally stress the already faltering organization. We, in Bellingham, have had enough of this predatory community bank. So
meanwhile, leave the trees standing. Take Horizon Bank down, one depositor at a time.
Posted Mon, Oct 26, 4:07 p.m. inappropriate
It’s safe to say that things worked quite differently in 1980 than they do today. However there is simply no excuse for continued errors in judgment and violations of proper public process. One point that should be made is that the bank can only continue to demand an overly inflated price for this land so long as they retain ownership and control of it. In the event that the bank was forced to divest itself of its interest in this project, normal market functions should come into play and potential buyers would see the project for what it really is; a financial, legal and public relations fiasco and value it accordingly. Given the banks precarious position and the dubious nature of the project’s financial prospects, one hopes that this situation may be happily resolved.
Although this project has received a degree of notoriety, similar scenarios continue to play themselves out elsewhere. Therefore it is fitting to ask how such perversions of the public interest might be prevented in the future.
Posted Mon, Oct 26, 4:19 p.m. inappropriate
bjohn,
At the outset of this fiasco was greed. What was lacking was integrity.
If decision makers act with integrity, such perversions of the public interest might be prevented in the future. Absent integrity, self-interest overwhelms the public process.
The public cannot attend every meeting and, of necessity, must rely on elected and appointed officials to fairly represent them. That takes integrity (combined with intestinal fortitude). Those with vested self-interests attend these meetings; many times, they are the only members of the public in attendance. Public servants need to know right from wrong, and they need to act accordingly.
Regarding the issue at hand - Fairhaven Highlands - Bellingham public servants have not acted with integrity. Whether they actually know right from wrong is hard to tell.
Posted Mon, Oct 26, 10:55 p.m. inappropriate
Mr. Simmons,
I'm not sure if you read follow these comments; however, I just re-read the subtitle to your article referring to the community's concern that the fate of this project rides on the FDIC's willingness to enforce its 1994 Order.
I'm not sure I agree. It's true that the FDIC could (and should) terminate the Fairhaven Highlands project at any moment; however, I am confident this project is going nowhere. There are so many obstacles to this development, and any one of them could result in rejection by the city. Not to mention Horizon's own financial challenges, separate from the 1994 FDIC order.
As you know, the FDIC issued a "cease & desist" order in March of this year requiring the bank to increase is Tier 1 capital ratio to 10% by the end of November. How likely is it that Horizon will essentially double its Tier 1 capital within the next 30 days or so?
I am not relying on the FDIC to terminate this project. I'm certain that will happen. That being said, the FDIC can terminate it tomorrow and should. That would save the city (and its taxpayers) a substantial sum by not having to process a development application that has been doomed from the start. FDIC action would be helpful; but our fate is not riding on it.
Posted Tue, Oct 27, 3:16 p.m. inappropriate
In Bob Simmons’s article, he mentions a family who refused to borrow $3 million from Horizon Bank due to the bank’s plan to follow through with trying to develop Chuckanut Ridge. I am the family member who told my siblings in early 2007 that I would not sign with Horizon Bank for our needed loan for our shopping center remodel. (We own the property at James and Alabama in the Sunnyland neighborhood.)
Before this occurred, I spoke directly with Laurie Evans, then president and chairperson for Horizon Bank, and asked him to reconsider developing this urban forested property and instead find a way to transfer this gem to public ownership and preservation. Mr. Evans refused, telling me how he thought the public would be pleased with their updated development plans. (This did not occur, to say the least!) Thus, I can proudly can say Peoples Bank, another local bank, is carrying our loan.
Our remodel has been a huge success, taking the decrepit, old buildings and turning it into a beautiful, classy shopping center. Trader Joe’s is our main tenant with various other tenants and our parking lot is bustling from 9 to 9. Sunnyland neighborhood’s character has been improved due to this remodel. Now, this is what many would call true infill, not sprawl as this proposed Fairhaven Highlands would be.
Posted Wed, Oct 28, 11:52 a.m. inappropriate
Whenever development is considered it is important to realize what is at stake. World wide we are loosing the environment to the expanding human footprint. The first priority of the Washington State Partnership for Puget Sound’s effort to save the sound is to preserve existing natural watersheds. High density development at Chuckanut Ridge would destroy the forest and wetlands on site and destroy or degrade everything down stream including Padden Creek, Chuckanut Creek, and Puget Sound. Fairhaven Highlands would wipe out most of bio diversity in South West Bellingham.
A common theme of the Sustainable Connections conferences on smart growth and green building is redevelopment or brown field development. The only way we can achieve a sustainable future is to preserve the natural environment we still have and accommodate growth by increasing density where infrastructure already exists.
Bellingham does have a choice. Redeveloping downtown, Old Town, and Urban villages would be smart growth. We don't have to destroy our environment to accommodate growth. pclark's shoping center is an example of smart growth redevelopment. If Bellingham needs more residential infill, a good way to do it would be to have residential above and parking below ground level commercial.
Christopher
Posted Wed, Oct 28, 10:09 p.m. inappropriate
Thank you pclark for your courage and INTEGRITY. Also, as a Sunnyland neighbor (I work there) I appreciate the positive spirit that newly emanates from your corner.
elk
Posted Wed, Oct 28, 10:13 p.m. inappropriate
CLICK ON LINKS for GRAPHICS.
Several great cities have had prudent and visionary planners. Whoever set Stanley Park (not one single person’s design) aside in Vancouver has left a wonderful legacy. Ditto for New York’s Central Park (designers Frederick Law Olmsted and Calvert Vaux). And kudos to the city of Bellingham for not developing the land this now our own mini-Stanley Park --- Cornwall Park, a magnificent urban forest and open space for all generations to enjoy.
If Cornwall Park somehow magically came under the control of Horizon Bank and David Edelstein, would they call development of that property infill? Think about it. Technically, yes. Morally? Rape. Shame on you Horizon Bank. Shame on you David Edelstein. Shame on you for turning a poor business investment into greed.
What everyone is calling permits (plural) are commonly referred to as entitlements. Entitlement MUST BE EARNED fairly and ethically, both the legal entitlement and the moral justification. Entitlement may never ever be taken as a given and thrust through the vesting process.
* I want the reader to think about the PAST: Cornwall Park.
* Now think about the PRESENT: Fairhaven Highlands.
* And below I offer an example of the FUTURE.
Let’s discard for a moment all the legal and technical discussions, arguments and maneuvering. Humor me here people and ASSUME for just a moment that we were all wrong about vesting, preservation, financial, cost, etc, etc, etc. --- that leaves the developer(s) and the governing authorities with a MORAL AND ETHICAL QUESTION: “Why are we proposing to disconnect an ecosystem from its larger connected whole?”
That includes the critters that live on this ridgetop and use the green corridors to move between the Chuckanut Mountains and our own little Chuckanut Ridge. It’s also the subterranean and surface water systems. It’s also the plants and aquatic animals. It’s all of it. It’s called a system. It’s the entire SYSTEM being asked to SACRIFICE its most northerly limb (literally and figuratively) for financial gain. Nothing more.
By way of FUTURE EXAMPLE, each of us, but especially the developer(s), should ask the above question in light of this fact. Pull a tax map of the lands on the northerly end of the Chuckanut Mountains, between California Street and Spokane Street. Note the numerous little rectgular lots and streets that have been legally created during some past entitlement process. Note on an aerial photo just the few sparse slopeside SINGLE-FAMILY houses, the steep slopes and mature forest.
Now take this same tax map and lay it on top a three-dimension terrain model (you can simulate this using Googe Earth). Notice that these lots are on the side of a steep mountain. Doesn’t look like such a good idea now, does it? Similarly, it wasn’t such a good idea to upzone Chuckanut Ridge, whether for rectangular lots or some other cockamamy subdivision.
The owners of those parcels near California Street, too, have a “right” and are entitled to develop their parcels. They also have a right to combine parcels into a larger tract of land and develop a subdivision.
Does this make sense to a reasonable person? It doesn’t matter in a 2-D world. That’s how it was platted and approved way back when. Same as the CR/FHH upzoning. Nonsensical. These property owners have some “entitlement” to develop one or more lots. Download my Google Earth overlay map file and fly around for yourself in 3-D (be sure and turn terrain = ON) and see how this is as meaningless as the various Horizon/Edelstein proposals called Fairhaven Highlands.
The approving powers-that-be have lost all sense of reality and don’t seem to understand that a two-dimensional line on a paper does not mean that it will work well in a three-dimensional world.
Borrowing from from Larry Horowitz and his DEIS comment letter and who is on the same SANE wavelength as I --- “The connector road was – and continues to be – an absurd idea based on a flat-earth view of the world. In a two-dimensional world, it is certainly easy enough to draw a line on a map to symbolize the connector road; however, in three-dimensional reality, that road illegally traverses several Category I mature forested wetlands and wetland buffers as well as steep, forested, and landslide-prone slopes. A very absurd idea, indeed. And one that could not be accomplished – on the ground - without violating common sense and environmental law.”
Now, here’s the TRICKY MORAL QUESTION that must be answered --- just because we have a legal right / entitlement to do “something” with our land, should we?
* Does it make topographic sense?
* Are we maybe doing something morally wrong?
* Maybe endangering others in the future, long after the developer has moved on to other projects, officials have been newly elected and staff have taken other jobs--- all the while liability has shifted to contractors, engineers and a homeowners association?
In many cases it’s a much better decision to leave land in its natural state because of the dramatic topographical damage that would be caused by a project. In other cases, it’s just not practical. As a civil engineer, I can design and engineer just about anything for anyone on any piece of God’s good green earth. BUT THAT’S NOT THE QUESTION AT HAND. I’ll say it again so city council and planning staff don’t miss it --- SHOULD WE BE DOING THIS?
Let me be very clear. If this project were located on a hilltop in the Cordata neighborhood AND IF it had the same ecological values AND IF it had connectivity/corridors to a larger ecological system, then I would be equally OPPOSED. That same hilltop in the Cordata neighborhood, disconnected from anything else AND having no wetlands or mature forest, then I would ENDORSE that proposal as a logical infill project easily connected to existing surrounding infrastruture.
That’s my food-for-thought for the day. I continue to oppose this project, not because I have vested interest ...
Posted Tue, Nov 3, 12:43 p.m. inappropriate
Horizon Bank filed its 3rd Qtr FDIC "Call Report" on Oct 30 and posted a $34+ million loss for the quarter. It's Tier 1 capital fell to $10.4 million and its Tier 1 leverage ratio fell below 1%.
In its March 2009 Order, the FDIC required Horizon Bank to increase its Tier 1 ratio to 10%. To do so, the bank will need to add $125 million in capital in the next 30 days. Based on HRZB's current stock price of $0.53, the bank's market capitalization (i.e., the entire market value of the bank) is only $6.34 million. How can Horizon Bank attract another $125 million in capital? It would need to sell almost 250 million new shares of stock in 30 days.
Is the writing already on the wall? What is the true fate of Chuckanut Ridge and Fairhaven Highlands?