Count First Market Bank among the local thrifts burned in the fallout from Fannie Mae and Freddie Mac. The Ukrop's-owned First Market, which has $1.3 billion in assets, reported recently that it lost $4.4 million as a result of Freddie Mac's crash.
Fannie Mae and Freddie Mac, which hold 58 percent of the nation's mortgages, fell into government control in early September after suffering huge losses in the subprime mortgage meltdown. Several Virginia-based banks with considerable Fannie and Freddie holdings were damaged in the fallout, including Central Virginia Bank and Gateway Financial, Bank of Richmond's parent, which was sold to Hampton Roads Bancshares after losing nearly $40 million.
First Market Bank was one of the lucky ones, it turns out. The bank, which is owned by Ukrop's Super Markets and the Ukrop family (60 percent) and Markel Corp. (40 percent), issued $6 million in common stock to beef up its capital after taking the hit.
“We actually added some additional common stock equity, from Ukrop's and Markel,” says Dave Fairchild, First Market's chief executive. “As we took that write-down it was a good time to add some common-stock equity. They were happy to put back $6 million.”
As the economy continues to weaken, banks across the country continue to absorb mortgage defaults and take hits to their lending portfolios. First Market, however, has managed to stay above the fray.
“We've been real fortunate in this market; Richmond has been fairly well insulated,” Fairchild says. “Our portfolio has held up very nicely. We're cautious with the outlook, but so far so good.”