Although this is a work in progress, recent McCain family news suggests that the McCain family has pretty strong ties to the troubled mortgage industry.
First, Andrew McCain - John McCain's Stepson - is CFO of Hensley & Company - Cindy McCain's family run business. see Hensley & Company Officers
Second, Andrew K. McCain was recently appointed to the Board of Directors of a mid-sized Nevada/Arizona bank called Silver State Bancorp. see Andrew McCain Appointed to Silverstate Board
Now for the interesting stuff.
It seems as though Silver State Bancorp, like many other Las Vegas-area banks, has been offering interest-only and other exotic loan types to homeowners. Read Full SEC 10-K Filing
Within this SEC 10-K filing, there is this specific quote
We also offer interest-only mortgage loans. These loans are designed for loan customers who desire flexible amortization schedules.
At first read, it appears that some of those loans may be impaired
Impaired loans pursuant to Statement of Financial Accounting Standards, or SFAS, 114, Accounting by Creditors for Impairment of a Loan, totaled $135.8 million and $938,000 as of December 31, 2007 and 2006, respectively. We are currently committed to lend approximately $23.8 million in additional funds on these impaired loans; however, management will continue to monitor the credit quality of these loans and will only lend additional funds as warranted. Impaired loans are individually assessed to determine whether a loan’s carrying value is not in excess of the fair value of the collateral or the present value of the loan’s cash flows
However upon further review, many of those home loans may not be part of the total bucket of impaired loans.
Smaller balance homogeneous loans that are collectively evaluated for impairment, such as residential mortgage loans and consumer loans, are specifically excluded from the impaired loan portfolio.
The bank does seem to be handling the situation nicely, although the number of impaired loans seems to have increased
We had seventy-seven and six loans classified as impaired at December 31, 2007 and 2006, respectively. A significant majority of the impaired loans as of December 31, 2007 relates to construction and land loans. As of December 31, 2007 $119.0 million of impaired loans do not have any specific valuation allowance under SFAS 114. Pursuant to SFAS 114, a loan is impaired when both the contractual interest payments and the contractual principal payments of a loan will not be collected as scheduled in the loan agreement. The $119.0 million of impaired loans as of December 31, 2007 are generally impaired due to delays or anticipated delays in receiving payments pursuant to the contractual terms of the loan agreements. These loans are adequately collateralized as of December 31, 2007. However, this assessment could change in the near future depending on various factors, including a decrease in the value of real estate values in southern Nevada and central Arizona
Although, I have not been able to find specific reference to Andrew McCain's compensation. I assume he is being renumerated in some way. I have other questions about the merger of Arizona subsidiary Choice Bank and the timing of Andrew McCain's appointment. Silver State and Choice Merger
Finally, there is this one quote from the SEC filing that gets me thinking:
Also, of our 20 largest depositors at December 31, 2007, two were entities affiliated with directors of Silver State Bank and Choice Bank representing 1.9% of our total deposits.
I have no idea who they might be, but I sure would like to know.