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<blockquote data-quote="Babagounj" data-source="post: 866088" data-attributes="member: 12952"><p>Fed Up: A Texas Bank Is Calling It Quits</p><p>Main Street Bank lends most of its money to small businesses and is earning decent profits. Nearly all of Main Street's $175 million loan portfolio has gone to customers like dentists, owners of fast-food franchises and delivery-truck drivers, who use the loans to purchase equipment. The bank's average loan size is $100,000 to customers who have less than $1 million in annual revenue. The bank has earned nearly $11 million in the past year. But the Kingwood, Texas, bank is about to get out of the banking business.</p><p></p><p>In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation's financial institutions, Main Street's chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.</p><p></p><p>Mr. Depping's new company, called Ascentium Capital, will be backed by Vulcan and a group of investors led by an investment arm of Luther King Capital Management, based in Fort Worth, Texas.</p><p>The new entity won't be regulated and won't be able to offer federal deposit insurance—but doesn't want to attract deposits, Mr. Depping says. The new firm is being capitalized with $75 million of equity and a $250 million financing facility led by <a href="http://online.wsj.com/public/quotes/main.html?type=djn&symbol=UBS" target="_blank">UBS</a>. Mr. Depping says he wants to ultimately increase the loan portfolio to $500 million.</p></blockquote><p></p>
[QUOTE="Babagounj, post: 866088, member: 12952"] Fed Up: A Texas Bank Is Calling It Quits Main Street Bank lends most of its money to small businesses and is earning decent profits. Nearly all of Main Street's $175 million loan portfolio has gone to customers like dentists, owners of fast-food franchises and delivery-truck drivers, who use the loans to purchase equipment. The bank's average loan size is $100,000 to customers who have less than $1 million in annual revenue. The bank has earned nearly $11 million in the past year. But the Kingwood, Texas, bank is about to get out of the banking business. In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation's financial institutions, Main Street's chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank. Mr. Depping's new company, called Ascentium Capital, will be backed by Vulcan and a group of investors led by an investment arm of Luther King Capital Management, based in Fort Worth, Texas. The new entity won't be regulated and won't be able to offer federal deposit insurance—but doesn't want to attract deposits, Mr. Depping says. The new firm is being capitalized with $75 million of equity and a $250 million financing facility led by [URL='http://online.wsj.com/public/quotes/main.html?type=djn&symbol=UBS']UBS[/URL]. Mr. Depping says he wants to ultimately increase the loan portfolio to $500 million. [/QUOTE]
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