Who are they?

The company

In 1999 the First Bank of Delaware opened its doors for business. The bank provides a full line of personal and business banking services ranging from home equity loans to cash management. First Bank of Delaware is currently operates two locations in Wilmington and one Lewes. In June ‘07 the institution held over $103 million in deposits.

The Head Man In-Charge

Sixty-four year old Harry Madonna chairs the bank’s board and also serves as its CEO. Prior to coming to First Bank of Delaware, Madonna served in several other executive banking positions, but his roots stem in law.

Place in the market

In the US, First Bank of Delaware’s stock is traded on the OTC BB. Over the past three years FBOD shares have averaged between $2.50 and $3.50 each. Share price peaked at $3.80 at the end of March ‘07. However, at the beginning of this month, shares closed at a five 5 year low of $1.81. Its stock is also traded on the Berlin Stock Exchange, where it is experiencing similar lows.

In the news

Old news - First Bank of Delaware was dinged by the FDIC because of concerns with its payday loan practices. The bank issued these loans through third party vendors such as Ace Cash Express. In 2006 the company stopped issuing these types of short term installment loan because the concerns were not resolved.

Recent news - The bank is listed as one of three defendants in a suit filed by the feds. The FTC and FDIC is seeking $200 million restitution $6.6 million in fines from CompuCredit, First Bank of Delaware and First Bank and Trust. According to the suit, First Bank of Delaware and its cohorts are fleecing Americans by employing deceptive lending practices. In the wake of the mortgage bust, the feds claim that these companies are involved in issuing credit cards in the sub-prime consumer market without fully disclosing associated fees. Mr. Madonna adamantly denies these allegations and remains firm that First Bank of Delaware has always been truthful when lending.

Other news - A Haverhill man realized that his identity had been stolen after discovering a Tribute Credit Card was issued in his name.

The card

The basics

• Tribute MasterCard is issued by First Bank of Delaware
• Unsecured card for people with a FICO score of at least 375
• Initial credit limit of $300
• Annual fee of $150
• $6.50 monthly maintenance fee
• 25 day grace period on new purchases
• Mandatory minimum first payment of $30 (must be paid before you can use the card)
• APR of 13.5% plus prime, but never lower than 19.5%
• Trouble paying on time?… then APR increases to 25.5%
• $35 fee for paying late or exceeding credit limit
• Credit limit increase within 6 months with good payment history

The extras

• Comes with travel accident insurance
• May be eligible for an additional card that has $70 limit

My take

The Tribute MasterCard is designed for people with poor credit. The card opens possibilities to those who have no other credit options. Though the cost of holding this card is expensive, it can be reasonably justified because the bank is taking a larger risk when lending in this market.

This card has received quite a few bad reviews. However, I think it can be a good card for some people in certain situation. And unlike another card in this category, the credit terms are easy to find and simple to understand. If used appropriately, the card allows those with poor credit to rebuild their situation. The Tribute MasterCard reports to all three credit bureaus… so as long as applicant understands and adheres to the terms, it can help.