ATLANTA, Georgia—The closing of Haven Trust Bank on 12 December 2008 was yet another sign of the difficult position that the hotel industry and economy at large are in. Twenty-five banks have closed so far in the U.S. in 2008, with 15 of them occurring in the final four months of the year, according to the Federal Deposit Insurance Corp. In contrast, 25 banks were closed in the seven-year span of 2001 through 2007.
Mike and RC Patel, founders of Haven Trust Bank, released the following statement about the closing of their bank, which they started in January 2000:

Mike Patel was chairman of Haven Trust’s board and RC Patel was a board member. Mike Patel also is president of Diplomat Hotel Corp., and RC Patel is chairman. Mike Patel was chairman of the Asian American Hotel Owners Association in 1998.
Branch Banking & Trust of Winston-Salem, North Carolina, assumed all of Haven Trust's deposits, including those that exceeded the insurance limit. As of 8 December, Haven Trust had total assets of US$572 million and total deposits of US$515 million. BB&T agreed to assume all of the deposits for US$112,000. In addition to assuming all of the failed bank's deposits, BB&T will purchase about US$55 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.
According to the company, two main factors precipitated the failure of the bank. The first is liquidity—the economic conditions caused the FDIC to increase the amount of money banks are required to keep on hand.
The second factor was the fall in real-estate values. The loans on the books were not worth as much as values continued to decrease.
H. Brandt Niehaus, president of Huff, Niehaus & Associates and Hotel Brokers International, said hotel loans are in a difficult position in today’s environment.
“When the lenders have had to reduce their real-estate loans to an acceptable ratio of the asset values and the asset values are not high enough, then they cannot loan until they can cover the loans or someone else will buy the paper,” he said. “The secondary market has dried up for the foreseeable future. Because of that, only loans that can be kept in house will be made for 2009.”
As for the Asian American hotel community, which the bank focused on, Niehaus said many of the established members who have good credit with their local and regional banks will be able to continue to get loans once banking in general begins to finance hotels sometime in the first quarter of 2009.
Because Haven Trust and Diplomat operated as separate entities, the failure of the bank will have no effect on the hotel company, according to the company.