Wednesday, July 17, 2002
Peoples says no '02 profit
Shareholders told it 'will be nonexistent'
By James McNair, firstname.lastname@example.org
By Patrick Crowley, email@example.com
The Cincinnati Enquirer
CRESTVIEW HILLS Peoples Bank of Northern Kentucky expects to make no money in 2002 because of loan writeoffs, legal expenses and the need to maintain its financial underpinnings in the wake of the Erpenbeck fiasco, bank president Merwin Grayson said after a special meeting of Peoples shareholders Tuesday night.
It (profit) will be nonexistent because we are taking all of our earnings and putting it toward our capital, paying the cost of litigation and maintaining a high degree of liquidity in the bank, Mr. Grayson said.
The eight-branch bank, which has more than $200 million in assets, is under review by the Federal Deposit Insurance Corp. and is part of an FBI bank-fraud investigation of the Erpenbeck Co., a home builder based in Edgewood. The FBI is looking into the misappropriation of millions of dollars in bank loans and home-purchase proceeds by Erpenbeck employees over the past 2 years.
Click here for all Enquirer reports on Erpenbeck Co.
If you have any additional information on the business dealings of
the Erpenbeck Co. or Peoples Bank of Northern Kentucky - or
on the involvement of any parties not yet identified in our coverage -
please email Enquirer business reporter James McNair at
firstname.lastname@example.org or Kentucky Enquirer reporter Patrick Crowley at
Mr. Grayson said the bank wrote off all identifiable losses in its Erpenbeck portfolio in June, an amount he put at $5 million. Peoples Bank had lent about $8 million to the Erpenbeck Co. and to members of the Erpenbeck family.
During the nearly two-hour meeting, attended by about 70 of the bank's 220 shareholders, questions were raised about the bank's ability to weather the crisis. Mr. Grayson reiterated that Peoples has the wherewithal to survive, provided that other banks and title companies involved in home closings contribute to help make up the $17 million allegedly diverted by Erpenbeck employees into the home builder's accounts at Peoples.
We've said we have responsibility, and we will pay our share, Mr. Grayson said. But other parties have to pay as well.
More than 200 Erpenbeck home buyers have filed a class-action lawsuit against Peoples, and the home buyers' lawyer, Stan Chesley, wants Boone County Circuit Judge Jay Bamberger to order a quick judgment. Peoples in turn named 14 banks and 23 title companies as third-party defendants that should help compensate the consumers.
Peoples has been the subject of takeover rumors, and its recent difficulties prompted a $25 million run by depositors, most of which has been replaced by fresh deposits. Mr. Grayson said the bank is not in any merger talks.
We've had inquiries, and I would imagine that we would continue to have inquiries
Accident more than a fender-bender
Budget cuts force branch cutbacks
City to turn over settlement money
Boycotters hope to silence Soulfest
Breathtaking smog becoming a dangerous day-to-day hassle
Contract goals set by CPS board
Input sought to protect watershed
Norwood loses brownfield grant
Obituary: Carol Ann Gabelman aided kids
Peoples says no '02 profit
Police identify body as fugitive's
State sues Dater trustees
Tristate A.M. Report
UC planning new option
Wild time at county fair
HOWARD: Some Good News
KORTE: City Hall
SMITH AMOS: Making progress
County character is back - with a new tank
Liberty Twp. almost ready to put fire levy on Nov. ballot
South Lebanon likely growing
Two teen boys arrested in cemetery vandalism
Fairly fun Kenton County throws a party
Health of Hispanics issue in Ky.
Lucas war chest dwarfs rival's
More tests indicate caterpillar behind foal losses
Park Hills making stand against porn
Senate leader: Unbalance budget worse than no budget
W. Ky. short on housing for fall term