What Happened to Hillcrest Bank Leasing?

Hillcrest Bank, Overland Bank, Kansas City with 41 branches was closed with a newly-chartered bank subsidiary of NBH Holding Corp., Boston, Massachusetts to assume all deposits October 22, 2010. Dec. 10, 2010 NBH Holding announced it had merged Midwest Bank with Hillcrest Bank.

“NBH Holdings Corp. (NBH) is a bank holding company created to build a leading community bank franchise delivering high quality client service and strong shareholder results. NBH raised in excess of $1.0 billion through the sale of common stock in a private placement in late 2009, making it one of the best-capitalized holding companies in the U.S.

“In 2010, NBH acquired two banks in the Kansas City, MO market: Bank Midwest and Hillcrest Bank. NBH recently added Bank of Choice in Greeley, CO and Community Banks of Colorado in Greenwood Village, CO to the company’s current community banking assets. This bank holding company is led by a highly experienced and accomplished management team with a successful track record of operating large and complex financial institutions.

“With Community Banks of Colorado, Bank of Choice, Bank Midwest and Hillcrest Bank, NBH now has 59 locations in the Rocky Mountain region, 78 banking centers in the Midwest and 4 locations in California. Latest includes the 37 Community Banks of Colorado banking centers and the 4 Community Banks of Northern California locations.

“With the acquisition of Community Banks of Colorado, NBH Holdings Corp. now has $6.7 billion in total assets and more than 1,100 associates.” http://www.nationalbankholdings.com/ContentDocumentHandler.ashx?documentId=10693

At the time, the leasing division was under the direction of Chuck Cannata, SVP, Commercial Leasing, in putting their company on the funder list reported 125 employees involved primarily in the Southeast marketplace is doing well promising good rates, no “Evergreen” lease options or splitting “Evergreen” lease payments with vendors. (1)

The company did not take broker business. They were heavy into copier leasing. Year-end 2009 the bank wrote off $7.7 million in “Lease financing receivables” and $4.4 million June 30, 2010.

Originally there was a relationship with SunBridge Capital, and on June 27, 2007 there was an announcement that Hillcrest would buy majority interest in SunBridge, primarily in the truck and trailer leasing business, but it fell apart, and new ownership reportedly took over.

Leasing News had several alerts about SunBridge, which eventually forced into involuntary Chapter 11 bankruptcy by three creditors on March 4, 2009. SunBridge closed on March 20, 2009 and filed Chapter 7 on May 21, 2009.

Ironically Commercial Equipment Lease, Eugene, Oregon, was also into truck and trailer leasing as well as the small ticket market place, when their parent bank, LibertyBank was closed by the FDIC on July 30th, 2010 and most assets sold to Home Federal Bank, Nampa, Idaho.

In an interview with Len E. Williams, President/CEO, Home Federal Bank, when asked what was going to happen to Commercial Leasing, he was very complimentary about the management of the leasing company by Jim Johnson, which had been in business for 35 years. In retrospect, he didn’t answer the question, as in September Commercial Leasing stopped taking business and all employees were let get except for caretakers of the portfolio.

At the announcement of the closing of Hillcrest Bank. Leasing News called and was told that Chuck Cannata was no longer there, that his right hand Karli (Curtis) Stecklein was now in charge of the department. She refused any interviews and directed us elsewhere.

In up-dating the story, there was no Midwest Bank leasing in operation by the bank, at least operators at various locations, and officers, were not aware, nor was there any listing on the bank website or in Google.

There is a Midwest Leasing, wholly owned subsidiary of Northland Financial, Bismarck, North Dakota. An email to Karlie Stecklein brought a response to contact BNH Holding, and her email noted her title was VP, Commercial Banking at Bank Midwest, N.A.

(Photo: Hillcrest Bank)

Chuck Cannata is noted on Linkedin.com, as president of Rx Net, Inc. since May, 2010. He was not available for a comment.

At press time, no officers or public relations spokesman would confirm or deny that the former Hillcrest Bank Leasing was still “active,” perhaps just in the role of letting the portfolio wind down or perhaps it was sold; more likely at the time of closing there were more lease financing receivables charged off.

The bank had lost $25.6 million June 30, 2009, year-end 2009 $83.4 million and $69.9 million June 30, 2010 after $53.9 million in construction and land development, $4.4 million in lease receivables, and $3.1 million in property secured by nonfarm nonresidential property.

“Hillcrest’s portfolio was spread across 42 states, and it financed projects for developers who operated in several states. Loans in California, Florida and Arizona — three real estate trouble spots — were part of the bank’s portfolio but limited to 18 percent of loans,” then Hillcrest CEO Jeff Wheeler had said.”

Real estate construction and land development was the prime downfall of the bank, with such loans for the development of $31.1 million to Quintero Golf & Country Club LLC and Quintero Entrado LLC in Arizona.

At the time the bank closed, the FDIC and Hillcrest Bank, N.A. which was to become Bank Midwest owned by BHNH Holding, entered into a loss-share transaction on $1.15 billion of Hillcrest Bank’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $329.7 million

(1) Chuck Cannata to head up Hillcrest Bank’s new commercial leasing program
http://www.leasingnews.org/archives/February%202008/02-18-08.htm#hill