Beal Financial Corporation is a bank holding company based in Plano, Texas that operates two federally chartered banks: Beal Bank, with 6 branches,[1] and Beal Bank USA, headquartered in Las Vegas, Nevada, with 10 branches and a direct bank.[2] It is on the list of largest banks in the United States. It was founded by and is entirely owned by billionaire Andrew Beal and specializes in acquiring distressed securities at discounted values. It acquires risky loans, but keeps a much higher equity buffer than other banks.[5][6]
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| Company type | Private | ||||||||||||||||||||||
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| Industry | Bank | ||||||||||||||||||||||
| Founded | March 10, 1988 | ||||||||||||||||||||||
| Founder | Andrew Beal | ||||||||||||||||||||||
| Headquarters | |||||||||||||||||||||||
| Owner | Andrew Beal | ||||||||||||||||||||||
| Website | www | ||||||||||||||||||||||
| Footnotes / references [1][2]
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History
editBeal Bank was founded on March 10, 1988 in Dallas, TX by Andrew Beal.[1][7][8] It began with $3 million in capital and a single branch in Carrollton, Texas.[9][10] During the savings and loan crisis, the bank purchased assets and real estate from failing banks and the Resolution Trust Corporation, a government-owned company that liquidated real estate and savings-and-loan assets.[5][8] By 1996, the bank was the most profitable bank in Texas.[11][12][13]
In 2000, the company acquired $1 billion of face value in commercial loans from the Small Business Administration at a discount.[8]
After the September 11 attacks, the company invested in distressed securities of airline companies.[8][14][15]
In 2003, the company acquired Southern Pacific Bank based in Torrance, California, with three branches and $834 million in deposits, after it was shut down by regulators.[16]
On August 2, 2004, it opened Beal Savings Bank headquartered in Las Vegas, Nevada. It was renamed Beal Bank USA in 2012.[2][17]
Beginning in 2004, the bank became a major lender to Donald Trump's casino properties while they went through bankruptcy, also offering to acquire the casinos outright.[18]
Between 2004 and 2007, the company slowed its asset acquisition and began to let its loans run off, as the founder was correctly worried about an impending crisis. Assets shrank from $7.7 billion to $2.9 billion.[19]
From 2008-2009, Beal Bank expanded, hiring analysts and evaluating mortgage bonds, debt and other assets being sold by financial institutions as a result of the 2007–2008 financial crisis. By 2009, the company had purchased nearly $5 billion in assets, including $1.8 billion in residential loans, a $465 million loan to LyondellBasell, and assets from 15 failed banks in the U.S.[20][21]
In April 2009, the company moved its headquarters from Dallas to Plano after buying the former headquarters of Petrofina.[22]
In December 2009, Beal Bank acquired New South Federal Savings Bank based in Irondale, Alabama, with $1.5 billion in assets.[23][24]
In January 2010, Beal Bank acquired Charter Bank of Santa Fe.[25] Its branches were sold to WaFd Bank in June 2011.[26]
In 2016, the bank acquired Sundevil Holdings LLC, the owner of two gas-fired power plants in Arizona, for a credit bid of $150 million after the company filed bankruptcy. It sold the units for $330 million in 2017.[27][28] Beal argued before federal regulators that California policies discriminated against generators powered by fossil fuels and “left [the state] dependent on energy sources that are unreliable for round-the-clock power”. Regulators determined in June 2019 that clean-energy providers had been “receiving unfair subsidies that allowed them to submit low bids to power purchasers”. According to the New York Times, Beal’s complaint against this discrimination aimed to “create a fair market and ensure system reliability, not to impede California’s transition to a carbon-free electric grid”.[18]
In November 2020, the bank acquired the $1 billion Campus at Legacy West development via foreclosure.[29]
In 2022, the bank invested heavily in Treasury Inflation-Protected Securities.[30]
References
edit- ^ a b c "Beal Bank". Federal Deposit Insurance Corporation.
- ^ a b c "Beal Bank USA". Federal Deposit Insurance Corporation.
- ^ "View -- Executive Summary Report". Federal Financial Institutions Examination Council.
- ^ "View -- Executive Summary Report". Federal Financial Institutions Examination Council.
- ^ a b Effinger, Anthony (July 9, 2011). "His hedge against risk: Bank deposits". The Washington Post.
- ^ Vardi, Nathan (April 15, 2015). "The Billionaire Banker Ready to Bet on Oil". Forbes.
- ^ Bandell, Brian (November 9, 2009). "Texas Billionaire Beal Seeks Failed Florida Bank". American City Business Journals.
- ^ a b c d Anders, George (January 13, 2005). "Maverick Banker in Texas Chases Distressed Assets". The Wall Street Journal.
- ^ "Beal Bank Owner Paved His Own Road to Becoming Dallas' Richest Man". The Dallas Morning News. February 21, 2010.
- ^ Pappalardo, Joe (March 1, 2001). "Love & Rockets". Dallas Observer.
- ^ Welch, David (July 15, 1996). "The Thrill is Gone: Beal Looks Beyond RTC Loans". American City Business Journals.
- ^ Bounds, Jeff (March 16, 1998). "Beal Aerospace Ready for Launch". American City Business Journals.
- ^ RICE, Melinda (February 1, 2000). "The Beal Conjecture". D Magazine.
- ^ Vardi, Nathan (January 23, 2013). "Billionaire Banker Targeting Big Banks Over Mortgages". Forbes.
- ^ "Andy Beal's road to become a billionaire with FDIC assets". The Economic Times. Bloomberg News. July 6, 2011.
- ^ "Regulators Close Southern Pacific". Los Angeles Times. February 8, 2003.
- ^ Segall, Eli (December 31, 2014). "Beal Bank's L.V. Headquarters Are Tiny, But Its $2.2B in Deposits Pack a Punch". Las Vegas Sun.
- ^ a b Penn, Ivan; Kaplan, Thomas (March 29, 2019). "A Texan's Big Bet on a Fossil-Fuel Future for California". The New York Times.
- ^ Weisenthal, Joe (April 4, 2009). "Texas Billionaire Andy Beal: Half The Country's Banks Could Go Bust". Business Insider.
- ^ Vardi, Nathan (March 1, 2010). "Billionaire Banker's Blowout Year". Forbes.
- ^ Vardi, Nathan (July 11, 2012). "The Banker Who Said No". Forbes.
- ^ Habal, Hala (September 3, 2000). "Beal Nabs Fina Campus". American City Business Journals.
- ^ Watt, Chad Eric (December 18, 2009). "Beal Bank acquires assets of failed New South Federal Savings Bank". American City Business Journals.
- ^ "Failed Bank Information for New South Federal Savings Bank, Irondale, AL". Federal Deposit Insurance Corporation.
- ^ Quick, Bob (January 25, 2010). "Charter Bank Quietly Reopens Under New Ownership". The Santa Fe New Mexican.
- ^ "Washington Federal buys Charter Bank". American City Business Journals. June 9, 2011.
- ^ Rizzo, Lillian (August 24, 2016). "Beal Bank Wins Court Approval to Buy Sundevil Power Plants". The Wall Street Journal.
- ^ Khalid, Usman (November 21, 2017). "Beal seeks FERC approval to sell Gila River units to Salt River Project". S&P Global.
- ^ Salchert, Ryan (November 12, 2020). "Beal Bank subsidiary takes over control of The Campus at Legacy West". American City Business Journals.
- ^ Vardi, Nathan (April 19, 2023). "Andy Beal, America's richest banker, makes a massive bond bet on inflation". MarketWatch.