Bank Failure Weekend – FDIC Swat Team Goes Into Action
The FDIC swat team has moved in on 4 more banking institutions and shut them down.
This weeks list of the unlucky recipients of a knock on the door from the FDIC takeover team include:
La Jolla Bank FSB (La Jolla, CA)
George Washington Savings Bank (Orland Park, IL)
The La Coste National Bank (La Coste, TX)
Marco Community Bank (Marco Island, FL)
Some of these banks were around before the Great Depression, and they survived. But the current financial disaster did them in.
—–
La Jolla Bank, FSB, La Jolla, California, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with OneWest Bank, FSB, Pasadena, California, to assume all of the deposits of La Jolla Bank, FSB.
The ten branches of La Jolla Bank, FSB will reopen on Monday as branches of OneWest Bank, FSB. Depositors of La Jolla Bank, FSB will automatically become depositors of OneWest Bank, FSB. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from OneWest Bank, FSB that it has completed systems changes to allow other OneWest Bank, FSB branches to process their accounts as well.
This evening and over the weekend, depositors of La Jolla Bank, FSB can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of December 31, 2009, La Jolla Bank, FSB had approximately $3.6 billion in total assets and $2.8 billion in total deposits. OneWest Bank, FSB did not pay the FDIC a premium for the deposits of La Jolla Bank, FSB. In addition to assuming all of the deposits of the failed bank, OneWest Bank, FSB agreed to purchase essentially all of the assets.
The FDIC and OneWest Bank, FSB entered into a loss-share transaction on $3.31 billion of La Jolla Bank, FSB’s assets. OneWest Bank, FSB will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-894-2927. The phone number will be operational this evening until 9:00 p.m., Pacific Standard Time (PST); on Saturday from 9:00 a.m. to 6:00 p.m., PST; on Sunday from noon to 6:00 p.m., PST; and thereafter from 8:00 a.m. to 8:00 p.m., PST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/lajolla.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $882.3 million. OneWest Bank, FSB’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives. La Jolla Bank, FSB is the 20th FDIC-insured institution to fail in the nation this year, and the second in California. The last FDIC-insured institution closed in the state was First Regional Bank, Los Angeles, on January 29, 2010.
—–
George Washington Savings Bank was founded in 1889. Wow, they had a good run, but poor management and high losses on loans put the nail in their coffin.
George Washington Savings Bank, Orland Park, Illinois, was closed today by the Illinois Department of Financial Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with FirstMerit Bank, National Association, Akron, Ohio, to assume all of the deposits of George Washington Savings Bank.
The four branches of George Washington Savings Bank will reopen on Saturday as branches of FirstMerit Bank, N.A. Depositors of George Washington Savings Bank will automatically become depositors of FirstMerit Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from FirstMerit Bank, N.A. that it has completed systems changes to allow other FirstMerit Bank, N.A. branches to process their accounts as well.
This evening and over the weekend, depositors of George Washington Savings Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of December 31, 2009, George Washington Savings Bank had approximately $412.8 million in total assets and $397.0 million in total deposits. FirstMerit Bank, N.A. will pay the FDIC a premium of 0.31 percent to assume all of the deposits of George Washington Savings Bank. In addition to assuming all of the deposits of the failed bank, FirstMerit Bank, N.A. agreed to purchase essentially all of the assets.
The FDIC and FirstMerit Bank, N.A. entered into a loss-share transaction on $324.2 million of George Washington Savings Bank’s assets. FirstMerit Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-837-0215. The phone number will be operational this evening until 9:00 p.m., Central Standard Time (CST); on Saturday from 9:00 a.m. to 6:00 p.m., CST; on Sunday from noon to 6:00 p.m., CST; and thereafter from 8:00 a.m. to 8:00 p.m., CST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/georgewashington.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $141.4 million. FirstMerit Bank, N.A.’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives. George Washington Savings Bank is the 19th FDIC-insured institution to fail in the nation this year, and the second in Illinois. The last FDIC-insured institution closed in the state was Town Community Bank and Trust, Antioch, on January 15, 2010.
—–
The La Coste National Bank, La Coste, Texas, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Community National Bank, Hondo, Texas, to assume all of the deposits of The La Coste National Bank.
The sole branch of The La Coste National Bank will reopen on Monday as a branch of Community National Bank. Depositors of The La Coste National Bank will automatically become depositors of Community National Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Community National Bank that it has completed systems changes to allow other Community National Bank branches to process their accounts as well.
This evening and over the weekend, depositors of The La Coste National Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of December 31, 2009, The La Coste National Bank had approximately $53.9 million in total assets and $49.3 million in total deposits. Community National Bank will pay the FDIC a premium of 0.51 percent to assume all of the deposits of The La Coste National Bank. In addition to assuming all of the deposits of the failed bank, Community National Bank agreed to purchase essentially all of the assets.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-830-3256. The phone number will be operational this evening until 9:00 p.m., Central Standard Time (CST); on Saturday from 9:00 a.m. to 6:00 p.m., CST; on Sunday from noon to 6:00 p.m., CST; and thereafter from 8:00 a.m. to 8:00 p.m., CST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/lacoste.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $3.7 million. Community National Bank’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives.
—–
Marco Community Bank, Marco Island, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Mutual of Omaha Bank, Omaha, Nebraska, to assume all of the deposits of Marco Community Bank.
The sole branch of Marco Community Bank will reopen on Saturday as a branch of Mutual of Omaha Bank. Depositors of Marco Community Bank will automatically become depositors of Mutual of Omaha Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Mutual of Omaha Bank that it has completed systems changes to allow other Mutual of Omaha Bank branches to process their accounts as well.
This evening and over the weekend, depositors of Marco Community Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of December 31, 2009, Marco Community Bank had approximately $119.6 million in total assets and $117.1 million in total deposits. Mutual of Omaha Bank will pay the FDIC a premium of 1.5 percent to assume all of the deposits of Marco Community Bank. In addition to assuming all of the deposits of the failed bank, Mutual of Omaha Bank agreed to purchase essentially all of the assets.
The FDIC and Mutual of Omaha Bank entered into a loss-share transaction on $104.8 million of Marco Community Bank’s assets. Mutual of Omaha Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-822-9247. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/marco.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $38.1 million. Mutual of Omaha Bank’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives. Marco Community Bank is the 17th FDIC-insured institution to fail in the nation this year, and the third in Florida. The last FDIC-insured institution closed in the state was Florida Community Bank, Immokalee, on January 29, 2010.
Bank Failures – Six More Banks Fail This Weekend
Six more banks have failed and were seized by the FDIC this weekend. Information for depositors can be found in the FDIC statements below for each bank.
The six bank failures this weekend are First National Bank of Georgia, Florida Community Bank of Immokalee Florida, Marshall Bank, N.A. of Hallock Minnesota, Community Bank and Trust of Cornelia Georgia, First Regional Bank of Los Angeles California, and American Marine Bank of Bainbridge Island Washington.
This was also a very costly weekend for the FDIC. For the six bank failures, the FDIC’s upfront costs to its reserve fund is estimated at $1,856,000,000. And an additional $4,019,500,000 in loss share agreements. Sheila Bair, what’s in ‘your’ wallet?
First National Bank of Georgia
FOR IMMEDIATE RELEASE
January 29, 2010First National Bank of Georgia, Carrollton, Georgia, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Community & Southern Bank, Carrollton, Georgia, a newly chartered institution, to assume all of the deposits of First National Bank of Georgia.
The 11 branches of First National Bank of Georgia will reopen on Saturday as branches of Community & Southern Bank. Depositors of First National Bank of Georgia will automatically become depositors of Community & Southern Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.
This evening and over the weekend, depositors of First National Bank of Georgia can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, First National Bank of Georgia had approximately $832.6 million in total assets and $757.9 million in total deposits. Community & Southern Bank will pay the FDIC a premium of 1.25 percent to assume all of the deposits of First National Bank of Georgia. In addition to assuming all of the deposits of the failed bank, Community & Southern Bank agreed to purchase essentially all of the assets.
The FDIC and Community & Southern Bank entered into a loss-share transaction on $607.4 million of First National Bank of Georgia’s assets. Community & Southern Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-886-2504. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/firstnational-carrollton.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $260.4 million. Community & Southern Bank’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives.
Florida Community Bank
FOR IMMEDIATE RELEASE
January 29, 2010Florida Community Bank, Immokalee, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Premier American Bank, National Association, Miami, Florida, to assume all of the deposits of Florida Community Bank.
The 11 branches of Florida Community Bank will reopen during normal business hours as branches of Premier American Bank, N.A., but will continue to conduct business under the name Florida Community Bank. Depositors of Florida Community Bank will automatically become depositors of Premier American Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Premier American Bank, N.A. that it has completed systems changes to allow other Premier American Bank, N.A. branches to process their accounts as well.
This evening and over the weekend, depositors of Florida Community Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, Florida Community Bank had approximately $875.5 million in total assets and $795.5 million in total deposits. Premier American Bank, N.A. will pay the FDIC a premium of 0.4 percent to assume all of the deposits of Florida Community Bank. In addition to assuming all of the deposits of the failed bank, Premier American Bank, N.A. agreed to purchase approximately $499.1 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.
The FDIC and Premier American Bank, N.A. entered into a loss-share transaction on $305.4 million of Florida Community Bank’s assets. Premier American Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-523-8275. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/floridacommunity.html.
As part of this transaction, the FDIC will acquire an equity appreciation instrument. This instrument serves as additional consideration for the transaction.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $352.6 million. Premier American Bank, N.A.’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives.
Marshall Bank, National Association, Hallock Minnesota
FOR IMMEDIATE RELEASE
January 29, 2010Marshall Bank, National Association, Hallock, Minnesota, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with United Valley Bank, Cavalier, North Dakota, to assume all of the deposits of Marshall Bank, N.A.
The three branches of Marshall Bank, N.A. will reopen on Monday as branches of United Valley Bank. Depositors of Marshall Bank, N.A. will automatically become depositors of United Valley Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use the former Marshall Bank, N.A. branch until they receive notice from United Valley Bank that it has completed systems changes to allow other United Valley Bank branches to process their accounts as well.
This evening and over the weekend, depositors of Marshall Bank, N.A. can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, Marshall Bank, N.A. had approximately $59.9 million in total assets and $54.7 million in total deposits. United Valley Bank will pay the FDIC a premium of 7.35 percent to assume all of the deposits of Marshall Bank, N.A. In addition to assuming all of the deposits, United Valley Bank agreed to purchase essentially all of the failed bank’s assets.
The FDIC and United Valley Bank entered into a loss-share transaction on $23.9 million of Marshall Bank, N.A.’s assets. United Valley Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-405-7869. The phone number will be operational this evening until 9:00 p.m., Central Standard Time (CST); on Saturday from 9:00 a.m. to 6:00 p.m., CST; on Sunday from noon to 6:00 p.m., CST; and thereafter from 8:00 a.m. to 8:00 p.m., CST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/marshall-mn.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $4.1 million. United Valley Bank’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives.
Community Bank and Trust of Georgia
FOR IMMEDIATE RELEASE
January 29, 2010Community Bank and Trust, Cornelia, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with SCBT, N.A., Orangeburg, South Carolina, to assume all of the deposits of Community Bank and Trust.
The 36 branches of Community Bank and Trust will reopen during normal business hours as branches of SCBT, N.A., but will continue to conduct business under the name Community Bank and Trust. Depositors of Community Bank and Trust will automatically become depositors of SCBT, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use the former Community Bank and Trust branch until they receive notice from SCBT, N.A. that it has completed systems changes to allow other SCBT, N.A. branches to process their accounts as well.
This evening and over the weekend, depositors of Community Bank and Trust can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, Community Bank and Trust had approximately $1.21 billion in total assets and $1.11 billion in total deposits. SCBT, N.A. did not pay the FDIC a premium to assume all of the deposits of Community Bank and Trust. In addition to assuming all of the deposits, SCBT, N.A. agreed to purchase essentially all of the failed bank’s assets.
The FDIC and SCBT, N.A. entered into a loss-share transaction on $827.7 million of Community Bank and Trust’s assets. SCBT, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-430-7974. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/cbt-cornelia.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $354.5 million. SCBT, N.A’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives.
First Regional Bank, Los Angeles California
FOR IMMEDIATE RELEASE
January 29, 2010First Regional Bank, Los Angeles, California, was closed today by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina, to assume all of the deposits of First Regional Bank.
The eight branches of First Regional Bank will reopen on Monday as branches of First-Citizens Bank & Trust Company. Depositors of First Regional Bank will automatically become depositors of First-Citizens Bank & Trust Company. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use the former First Regional Bank branch until they receive notice from First-Citizens Bank & Trust Company that it has completed systems changes to allow other First-Citizens Bank & Trust Company branches to process their accounts as well.
This evening and over the weekend, depositors of First Regional Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, First Regional Bank had approximately $2.18 billion in total assets and $1.87 billion in total deposits. First-Citizens Bank & Trust Company did not pay the FDIC a premium to assume all of the deposits of First Regional Bank. In addition to assuming all of the deposits, First-Citizens Bank & Trust Company agreed to purchase approximately $2.17 billion of the First Regional Bank’s assets. The FDIC retained the remaining assets for later disposition.
The FDIC and First-Citizens Bank & Trust Company entered into a loss-share transaction on $2 billion of First Regional Bank’s assets. First-Citizens Bank & Trust Company will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-591-2817. The phone number will be operational this evening until 9:00 p.m., Pacific Standard Time (PST); on Saturday from 9:00 a.m. to 6:00 p.m., PST; on Sunday from noon to 6:00 p.m., PST; and thereafter from 8:00 a.m. to 8:00 p.m., PST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/firstregional.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $825.5 million. First-Citizens Bank & Trust Company’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives.
American Marine Bank of Bainbridge Island Washington
FOR IMMEDIATE RELEASE
January 29, 2010American Marine Bank, Bainbridge Island, Washington, was closed today by the Washington Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Columbia State Bank, Tacoma, Washington, to assume all of the deposits of American Marine Bank.
The 11 branches of American Marine Bank will reopen on Saturday as branches of Columbia State Bank. Depositors of American Marine Bank will automatically become depositors of Columbia State Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Columbia State Bank that it has completed systems changes to allow other Columbia State Bank branches to process their accounts as well.
This evening and over the weekend, depositors of American Marine Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, American Marine Bank had approximately $373.2 million in total assets and $308.5 million in total deposits. Columbia State Bank will pay the FDIC a premium of 1.0 percent to assume all of the deposits of American Marine Bank. In addition to assuming all of the deposits of the failed bank, Columbia State Bank agreed to purchase essentially all of the assets.
The FDIC and Columbia State Bank entered into a loss-share transaction on $255.1 million of American Marine Bank’s assets. Columbia State Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-517-8236. The phone number will be operational this evening until 9:00 p.m., Pacific Standard Time (PST); on Saturday from 9:00 a.m. to 6:00 p.m., PST; on Sunday from noon to 6:00 p.m., PST; and thereafter from 8:00 a.m. to 8:00 p.m., PST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/americanmarine.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $58.9 million. Columbia State Bank’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives.
Bank Failures For January 22 – Charter Bank, Bank of Leeton, Premier American Bank
Bank failure Friday:
Charter Bank – Sante Fe, NM Failure
FOR IMMEDIATE RELEASE
January 22, 2010Charter Bank, Santa Fe, New Mexico, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Charter Bank, Albuquerque, New Mexico, a newly-chartered federal savings bank and a subsidiary of Beal Financial Corporation, Plano, Texas, to assume all of the deposits of Charter Bank.
The eight branches of Charter Bank will reopen on Monday as branches of Charter Bank. Depositors of Charter Bank will automatically become depositors of Charter Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.
This evening and over the weekend, depositors of Charter Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, Charter Bank had approximately $1.2 billion in total assets and $851.5 million in total deposits. Charter Bank did not pay the FDIC a premium for the deposits of Charter Bank. In addition to assuming all of the deposits of the failed bank, Charter Bank agreed to purchase essentially all of the assets.
The FDIC and Charter Bank entered into a loss-share transaction on $805.5 million of Charter Bank’s assets. Charter Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-323-6111. The phone number will be operational this evening until 9:00 p.m., Mountain Standard Time (MST); on Saturday from 9:00 a.m. to 6:00 p.m., MST; on Sunday from noon to 6:00 p.m., MST; and thereafter from 8:00 a.m. to 8:00 p.m., MST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/charter-nm.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $201.9 million. Charter Bank’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives. Charter Bank is the seventh FDIC-insured institution to fail in the nation this year, and the first in New Mexico. The last FDIC-insured institution closed in the state was Zia New Mexico Bank, Tucumcari, on April 23, 1999.
Bank of Leeton , Leeton, MO Failure
FOR IMMEDIATE RELEASE
January 22, 2010Bank of Leeton, Leeton, Missouri, was closed today by the Missouri Division of Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Sunflower Bank, National Association, Salina, Kansas, to assume all of the deposits of Bank of Leeton.
The sole branch of Bank of Leeton will reopen on Saturday as a branch of Sunflower Bank, N.A. Depositors of Bank of Leeton will automatically become depositors of Sunflower Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Sunflower Bank, N.A. that it has completed systems changes to allow other Sunflower Bank, N.A. branches to process their accounts as well.
This evening and over the weekend, depositors of Bank of Leeton can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of December 31, 2009, Bank of Leeton had approximately $20.1 million in total assets and $20.4 million in total deposits. Sunflower Bank, N.A. will pay the FDIC a premium of 0.59 percent to assume all of the deposits of Bank of Leeton. The FDIC as receiver will retain most of the assets from Bank of Leeton for later disposition.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-523-8209. The phone number will be operational this evening until 9:00 p.m., Central Standard Time (CST); on Saturday from 9:00 a.m. to 6:00 p.m., CST; on Sunday from noon to 6:00 p.m., CST; and thereafter from 8:00 a.m. to 8:00 p.m., CST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/leeton.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $8.1 million. Sunflower Bank’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives. Bank of Leeton is the sixth FDIC-insured institution to fail in the nation this year, and the first in Missouri. The last FDIC-insured institution closed in the state was Gateway Bank of St. Louis, on November 6, 2009.
Premier American Bank – Miami, FL Failure
Sphere: Related ContentFOR IMMEDIATE RELEASE
January 22, 2010Premier American Bank, Miami Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Premier American Bank, National Association, Miami, Florida, a newly-chartered national institution, to assume all of the deposits of Premier American Bank. Premier American Bank, N.A. is a subsidiary of Bond Street Holdings, LLC, Naples, Florida.
The four branches of Premier American Bank will reopen on Monday as branches of Premier American Bank, N.A. Depositors of Premier American Bank will automatically become depositors of Premier American Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.
This evening and over the weekend, depositors of Premier American Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, Premier American Bank had approximately $350.9 million in total assets and $326.3 million in total deposits. Premier American Bank, N.A. did not pay the FDIC a premium for the deposits of Premier American Bank. In addition to assuming all of the deposits of the failed bank, Premier American Bank, N.A. agreed to purchase essentially all of the assets.
The FDIC and Premier American Bank, N.A. entered into a loss-share transaction on $300 million of Premier American Bank’s assets. Premier American Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-591-2916. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/premieramerican.html.
As part of this transaction, the FDIC will acquire a cash participant instrument. This instrument serves as additional consideration for the transaction.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $85 million. Premier American Bank, N.A.’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives. Premier American Bank is the fifth FDIC-insured institution to fail in the nation this year, and the first in Florida. The last FDIC-insured institution closed in the state was Peoples First Community Bank, Panama City, on December 18, 2009.
Bank Failure – Horizon Bank of Bellingham, Washington
Horizon Bank, Bellingham, Washington takes the honors of being the first bank failure of 2010.
Horizon Bank was on the naughty bank list with a cease and desist order for unsafe and unsound banking practices.
Excerpt from FDIC-08-404B (issued 3/3/09) issued to Horizon Bank:
(a) operating with management whose policies and practices are detrimental to the Bank and jeopardize the safety of its deposits;
(b) operating with a board of directors which has failed to provide adequate supervision over and direction to the active management of the Bank;
(c) operating with inadequate capital in relation to the kind and quality of assets held by the Bank;
(d) operating with an inadequate loan valuation reserve;
(e) operating with a large volume of poor quality loans;
(f) operating in such a manner as to produce low earnings; and
(g) operating with inadequate provisions for liquidity.
Remember that you can research your own bank to see if they have been slapped with any cease and desist orders in the past, or any other orders issued by the FDIC and banking regulators. The information shown above is available to the public, albeit not well known. You can see my November 2009 list of FDIC actions in my post on November 4, 2009.
Sphere: Related ContentHorizon Bank, Bellingham, Washington, was closed today by the Washington State Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Washington Federal Savings and Loan Association, Seattle, Washington, to assume all of the deposits of Horizon Bank.
The 18 branches of Horizon Bank will reopen during their normal business hours beginning tomorrow as branches of Washington Federal Savings and Loan Association. Depositors of Horizon Bank will automatically become depositors of Washington Federal Savings and Loan Association. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Washington Federal Savings and Loan Association that it has completed systems changes to allow other Washington Federal Savings and Loan Association branches to process their accounts as well.
This evening and over the weekend, depositors of Horizon Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, Horizon Bank had approximately $1.3 billion in total assets and $1.1 billion in total deposits. Washington Federal Savings and Loan Association did not pay the FDIC a premium to assume all the deposits the Horizon Bank. In addition to assuming all of the deposits of the failed bank, Washington Federal Savings and Loan Association agreed to purchase essentially all of the assets of the failed bank.
The FDIC and Washington Federal Savings and Loan Association entered into a loss-share transaction on approximately $1.0 billion of Horizon Bank’s assets. Washington Federal Savings and Loan Association will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-430-6165. The phone number will be operational this evening until 9:00 p.m., Pacific Standard Time (PST); on Saturday from 9:00 a.m. to 6:00 p.m., PST; on Sunday from noon to 6:00 p.m., PST; and thereafter from 8:00 a.m. to 8:00 p.m., PST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/horizon-wa.html.
Sunday Reading – Bank Failures, Foreclosures, Bankruptcies, and Profits From Death
Bank failures, air traffic, profits from death, foreclosures, and more items from the web and the news wires. Also this weeks schedule of events.
Citadel Broadcasting files for bankruptcy
Busy (and very expensive) weekend for bank failures.
- First Federal Bank of California (cost to the FDIC: $146.3 million + $5.3 billion in loss-share agreements)
- Imperial Capital Bank (cost to the FDIC: $619.2 million + $2.5 billion loss-share agreements)
- Independent Bankers’ Bank of Illinois (cost to the FDIC: $68.4 million)
- New South Federal Savings Bank (cost to the FDIC: $212.3 million + $1.2 billion in loss-share agreements)
- Citizens State Bank (cost to the FDIC: $76.6 million)
- Peoples First Community Bank (cost to the FDIC: $556.7 million + $1.4 billion in loss-share agreements)
- RockBridge Commercial Bank (cost to the FDIC: $124.2 million)
And while we are talking about costs to the FDIC, consider just how bad the FDIC is at estimating the ‘real’ cost – FDIC estimated Colonial Bank cost would be $2.8 billion, but the real cost has risen to $5.8 billion.
2010 forecasts from the Market Oracle
$36 /hour to $13 /hour. White-collars turn blue
Global air passenger traffic drops by largest amount in aviation history
Obama’s “Home Affordable Modification Program” – Huge Failure
Foreclosure backlog is huge
Goldman Sachs ditches attempts to profit from death
Fewer states add jobs – Green shoot is dying (RT note: watch for the surge in layoffs in retail sectors in January and February)
AIG – cough up the e-mails
Washington for Sale – Bill Moyer video link , Robert Kuttner and Matt Taibbi guests.
Iceland – Sovereign rating at risk yet again over internal financial battles. One more rating cut and Iceland will be classified as junk.
Greece admits that sovereign rating may be cut by Moody’s
Things are big in Oklahoma – like their record setting deficit
United Kingdom – Property is a black hole, more bank losses.
(IQ) Earlier on Sunday, Iraq halted crude oil exports from its northern oil fields to the Ceyhan port near Turkey – Press (Update)
- The move came after it was reported that a main pipeline in northern Iraq was attacked.
- The attack occurred at around 8:30 p.m.on Saturday (1730 GMT)
- According to one estimate, the pipeline’s capacity is equal to about 450K bpd (approximately 23% of Iraq’s exports) (wire report)
Events for the week of December 21 to 25:
Monday:
08:30 - Nov Chicago Fed Index (last -1.08)
Tuesday:
FDIC To Hire 1,643 Temporary Employees To Assist With Growing Bank Failures
The Federal Deposit Insurance Corp (FDIC) has approved a new budget that expands the operating budgets for dealing with increased bank failures in 2010.
Sphere: Related ContentThe Federal Deposit Insurance Corp. is boosting its budget by 55 percent and will increase its work force by 23 percent as it struggles to keep up with bank closings.
The FDIC’s board of directors Tuesday approved a $4 billion corporate operating budget for fiscal 2010, $1.4 billion higher than its 2009 budget. The receivership funding component of the 2010 budget will nearly double, from $1.3 billion to $2.5 billion.[...]
[...]The FDIC board also authorized increasing its staffing level in 2010 from the current 7,010 to 8,653. It says the majority of those 1,643 new jobs will be temporary and will be hired to help with bank closings and examinations.[...] (Source: MSN) – H/T Butch
Bank Failures – FDIC Has A Busy and Expensive Weekend
The usual FDIC slaughter Friday came this week with six more bank failures. The largest was AmTrust Bank which I discussed only days ago in this December 2nd post. The FDIC never tells the public in advance when a financial institution will be closed. But if you keep your eyes on previous cease and desist orders, and other FDIC / banking regulator orders to banks you can make your own judgments as to the health of your bank. Please consider my article posted on November 4 2009 which contains a list of FDIC actions against U.S. banks
—–
AmTrust Bank was closed and the FDIC was named receiver.
FOR IMMEDIATE RELEASE
DECEMBER 4, 2009
AmTrust Bank, Cleveland, Ohio, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with New York Community Bank, Westbury, New York, to assume all of the deposits of AmTrust Bank.
The 66 branches of AmTrust Bank will reopen during their normal business hours beginning tomorrow as branches of New York Community Bank. Depositors of AmTrust Bank will automatically become depositors of New York Community Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit coverage. Customers should continue to use their existing branches until New York Community Bank can fully integrate the deposit records of AmTrust Bank.
This evening and over the weekend, depositors of AmTrust Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of October 27, 2009, AmTrust Bank had total assets of approximately $12.0 billion and total deposits of approximately $8.0 billion. New York Community Bank did not pay a premium to assume all of the deposits of AmTrust Bank. In addition to assuming all of the deposits of the failed bank, New York Community Bank agreed to purchase approximately $9.0 billion in assets of AmTrust Bank. The FDIC will retain the remaining assets for later disposition.
The FDIC and New York Community Bank entered into a loss-share transaction on approximately $6.0 billion of AmTrust Bank’s assets (emphasis added). New York Community Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-450-5143. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST. Interested parties also can visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/amtrust.html .
As part of this transaction, the FDIC will acquire a cash participant instrument. This will serve as additional consideration for the transaction. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $2.0 billion. (emphasis added)
Furthermore, the FDIC transferred to New York Community Bank all qualified financial contracts to which AmTrust was a party.
—–
It gets better, click the ‘read more’ to continue the article…
Sphere: Related ContentBank of America (BAC) To Be Unchained – To Pay Back TARP
Watch out! Bank of America is soon to be let loose once the TARP chains are cut. Announced this evening is that Bank of America will repay $45 Billion in TARP funds by using $26.2 Billion from its excess reserves, and essentially the remainder comes from throwing existing shareholders under the bus.
Bank of America Corp Confirms plans to repay entire $45B TARP funds (about 33% of market cap)Under terms of the authorization from the U.S. Treasury and banking regulators to repay the $45 billion investment made under TARP, Bank of America will repurchase all 600,000 shares of the company’’s Fixed Rate Cumulative Perpetual Preferred Stock, Series N; all 400,000 shares of the company’’s Fixed Rate Cumulative Perpetual Preferred Stock, Series Q; and all 800,000 shares of the company’’s Fixed Rate Cumulative Perpetual Preferred Stock, Series R. The shares were issued to the U.S. Treasury as part of TARP. Bank of America is not exercising its right to repurchase the related warrants at this time.
Bank of America plans to repay the $45 billion in TARP funds using $26.2 billion in excess liquidity and $18.8 billion in proceeds from the sale of “common equivalent securities.
The $18.8 billion issuance of “common equivalent securities” would be treated as Tier 1 Common capital. Shareholders would be asked at a special meeting to be held within 105 days of issuance to approve an increase in the authorized shares outstanding in order to allow the “common equivalent securities” to be converted into common stock.
The “common equivalent securities” carry warrants to buy a total of 60 million shares of common stock at $0.01 per share and other benefits if shareholders do not approve an increase in authorized common shares. In addition, Bank of America agreed to increase equity by $4 billion through asset sales to be approved by the Board of Governors of the Federal Reserve and contracted for by June 30, 2010. To the extent those asset sales are not completed by the end of 2010, the company agreed it would raise a commensurate amount of common equity.
Bank of America also agreed to raise up to approximately $1.7 billion through the issuance of restricted stock in lieu of a portion of incentive cash compensation to certain Bank of America associates as part of their normal year-end incentive payments. After the TARP repayment and these initiatives, the company’’s Tier 1 Capital ratio would be 11.0 percent, pro forma based on the September 30, 2009 ratio of 12.5 percent. The Tier 1 Common capital ratio would be 8.5 percent, pro forma based on the September 30, 2009 ratio of 7.3 percent. The company will continue to have strong liquidity.
Repurchase of TARP preferred stock is expected to reduce income available to common shareholders in the fourth quarter by $4.1 billion, as the book value of the preferred is less than the amount paid.
Bank of America seems to be going to rather extraordinary measures to repay the TARP as quickly as possible. When banks still need to build up loss reserves here is BAC tapping into their piggy bank to pay off the Government. The timing of this announcement sure is interesting to say the least as it comes the night before Fed Chairman Ben Bernanke’s confirmation hearings.
Oh, in other Bank of America news:
NEW YORK, Dec 2 (Reuters) – Bank of America Corp <BAC.N> on Wednesday announced cash awards that could reach seven figures for three senior executives, including two whose salaries were cut after a review by White House pay czar Kenneth Feinberg.
On November 30, Thomas Montag, head of global markets and banking, was awarded stock units valued at $4.57 million, based on the bank’s Wednesday closing price of $15.65.
On the same day, Chief Financial Officer Joe Price received an award valued on the same basis at $2.58 million, while home loans and insurance chief Barbara Desoer got an award valued at $1.94 million. [...]
Do you hold a mortgage with Bank of America? Were you hoping to get a loan workout approved? With the TARP chain being cut you better watch out for they will have no obligations any longer to play nice. Watch out, Bank of America will be free to whore around like Tiger Woods all over again.
Sphere: Related ContentMany Chicago Area Banks Have Capital Issues
I wonder if the FDIC is getting ready to staff another field office in Chicago…
Sphere: Related ContentNearly 40 Chicago-area banks as of Sept. 30 had seriously delinquent loans and foreclosed real estate on their books that exceed or come close to their levels of loan reserves plus core capital, according to Loan Workout Advisers LLC.
The number of local banks with real estate-focused Texas ratios of at least 80 percent grew to 39 at the end of the third quarter, up from 36 in the second quarter and 29 in the first quarter, said Justin Barr, managing principal of the Northfield-based bank turnaround consulting firm. Of the 39, three have since failed.[...]
[...]A Texas ratio tallies up a bank’s severely past-due loans and foreclosed real estate and compares them with the levels of a bank’s core capital, typically shareholders’ equity, and the money set aside for potential loan losses. A score of at least 80 percent is considered a cause for concern. A Texas ratio puts a bank’s asset problems in the context of its capital and reserve levels, so it’s considered a good predictor of difficulties.
To lower it, banks need to lower their levels of souring loans, sell the real estate they repossessed, raise capital or set aside more reserves for potential loan losses.
“The latest Texas ratio data tells the story of an accelerating crisis in the community banking sector in Chicago,” Barr said. If it continues, it will hurt economic recovery, he said.[...] (Source: Chicago Tribune)
AmTrust Financial Bankruptcy
Today AmTrust Financial Corporation (parent of AmTrust Bank) has filed for bankruptcy protection. The filing does not include the retail banking operations. However it needs to be known that the FDIC has been seeking a buyer for the retail banking operations of AmTrust Bank.
From all appearances it would seem that AmTrust Bank will likely end up under FDIC receivership.
Sphere: Related ContentAmTrust Financial Corp., the owner of a Cleveland thrift clobbered by losses and shrinking capital, filed for bankruptcy protection amid a push by federal regulators to find a buyer for the thrift, according to people familiar with the situation.
Monday’s filing in U.S. Bankruptcy Court in Cleveland didn’t include AmTrust Bank, which has about $11.7 billion in assets and 66 branches but posted a net loss of $269.9 million in the third quarter. The banking unit is considered undercapitalized by regulators as a result of the housing crisis, which battered areas such as Arizona and Florida where AmTrust was an aggressive mortgage lender.
In an affidavit filed with the court, AmTrust Chief Executive Peter Goldberg said the recession has “severely impacted” the parent company because of its “significant investments” in residential mortgages and loans for construction and land development. The company decided to seek Chapter 11 protection from creditors despite having “diligently attempted to survive the downturn in the economy,” he said in the court filing. [...]
[...] The Federal Deposit Insurance Corp. has been conducting an auction for AmTrust Bank, and bids were due last Wednesday, according to people familiar with the matter. The auction process could result in AmTrust’s seizure by the Office of Thrift Supervision. In that scenario, AmTrust would be sold by the FDIC to another financial institution.[...]
[...]As AmTrust Bank’s real-estate troubles deepened, the FDIC began contacting rivals earlier this year to gauge their interest in taking over the thrift, according to people familiar with the matter. Regulators subsequently agreed to give AmTrust executives more time to try to stabilize the institution.
If AmTrust is seized, it would be the fifth-largest U.S. bank failure based on assets out of 124 so far this year[...] (source: WSJ , h/t Butch)
Bank Failure – Commerce Bank of Southwest Florida Shut Down
Commerce Bank of Southwest Florida (Fort Myers) has failed and the FDIC was appointed receiver.
On Friday, November 20, 2009 Commerce Bank of Southwest Florida, Fort Myers, FL was closed by the Florida Office of Financial Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.  No advance notice is given to the public when a financial institution is closed.[...] FDIC statement
This is another case where the public had some advance warnings that the bank ‘may’ have been in trouble.
July 9, 2009 (Cease and Desist Order FDIC-09-113b)
[...]Commerce Bank of Southwest Florida, Fort Myers, Florida, (“Bankâ€), having been advised of its right to a NOTICE OF CHARGES AND OF HEARING detailing the unsafe or unsound banking practices alleged to have been committed by the Bank[...]
[...]The FDIC and OFR considered the matter and determined that they had reason to believe that the Bank had engaged in unsafe or unsound banking practices[...]
[...] IT IS HEREBY ORDERED, that the Bank, its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and Section 655.005(1)(i), Florida Statutes, and its successors and assigns, cease and desist from the following unsafe or unsound banking practices:
A. Engaging in hazardous lending and lax collection practices.
B. Operating with an inadequate level of capital protection for the kind and quality of assets held.
C. Operating with an excessive level of adversely classified assets, delinquent loans, and nonaccrual loans.
D. Operating with inadequate liquidity in light of the Bank’s asset and liability mix.
E. Operating in such a manner as to generate inadequate earnings.
F. Operating with an inadequate allowance for loan and lease losses for the volume, kind, and quality of loans and leases held.
G. Operating with an excessive concentration of credit in commercial real estate loans.
H. Operating with excessive interest rate risk.
I. Operating with management whose policies and practices are detrimental to the Bank and jeopardize the safety of its deposits. (emphasis added)
This Cease and Desist order is public information available from the FDIC’s own web site if you know where to look. See 2009 FDIC actions in my November 4, 2009 post.
The entire Cease and Desist order from July 9, 2009 –
Sphere: Related ContentBank Failures – This Time We Dig Into The Facts
Yesterday’s five bank failures bring the number of banks to fail during this economic storm to 120. Should these bank failures come as a surprise? No, some were already slapped with a Cease and Desist order prior to the FDIC shutting them down. The FDIC never announces to anyone, not even to the bank being closed that they will be seized ahead of time.
When the FDIC shows up at the bank it is most often done on a Friday after the bank has said goodnight to their last customer for the day. As the bank is about to lock the doors for the night it is then that the FDIC and regulators enter the facility and announce that they are being put into the control of the FDIC.
The FDIC feels it is in everyone’s best interest to never let the public or anyone else know ahead of time that a bank is about to be seized for fear of creating a panic situation among depositors. If I knew that my bank was going to be seized next Friday the first thing I would do is go and withdraw all of my funds and this is what they want to avoid, even if it means knowing that some depositors will not receive all of their money (for having more than the $250K limit). Even if I had less than the $250K limit I would still take my funds out for fear of having to wait for my money to be returned to me by the FDIC or wait while a new bank takes over my accounts.
So is there really no way at all to know a bank ‘may‘ be in trouble? Yes there is, just look at the list I published on November 4th (Barney Frank Tells Regulators to be Deaf, Dumb, and Blind). This is public information that anyone can find on the FDIC website.
Let’s look at some of the banks that failed yesterday:
First is United Commercial Bank of San Francisco.
United Commercial Bank, San Francisco, California, was closed today by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
If you had an account at First United Commercial Bank you probably awoke this morning and heard about it on your local news. You probably went into the bank in previous weeks and months never knowing anything was wrong, the same smiling faces were behind the counters, the deposit slips were still on the tables, and the floors were clean and shinny.
But, behind the scenes the management of United Commercial Bank of San Francisco was notified on September 3rd of 2009 that they were operating in a manner that was judged to be unsafe. United Commercial appears on the list of Cease and Desist orders issued by the FDIC. What did the FDIC tell United Commercial?
(excerpt from FDIC order dated September 3, 2009)
The FDIC and the CDFI considered the matter and determined that they had reason to believe that the Bank had engaged in unsafe or unsound banking practices. The FDIC and the CDFI, therefore, accepted the CONSENT AGREEMENT and issued the following:
ORDER TO CEASE AND DESIST
IT IS HEREBY ORDERED, that the Bank, its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns, cease and desist from the following unsafe and unsound banking practices, as more fully set forth in the Joint FDIC and CDFI Report of Examination dated April 6, 2009 (“ROEâ€):
(a) operating with management whose policies and practices are detrimental to the Bank and jeopardize the safety of its deposits;
(b) operating with a board of directors which has failed to provide adequate supervision over and direction to the active management of the Bank;
(c) operating with inadequate capital in relation to the kind and quality of assets held by the Bank;
(d) operating with an inadequate loan valuation reserve;
(e) operating with a large volume of poor quality loans;
(f) engaging in unsatisfactory lending and collection practices;
(g) operating in such a manner as to produce operating losses;
(h) operating with inadequate provisions for liquidity; and
(i) operating in violation of the following laws and regulations:
(i) Section 7(a)(1) of the Federal Deposit Insurance Act, 12 U.S,C, § 1817(a)(1); and
- 3 -
(ii) Section 103.121(b)(2)(i)(B) of the United States Department of the Treasury’s Financial Recordkeeping regulations, 31 C.F.R. § 103.121(b)(2)(i)(B).
(j) operating in contravention of the following:
(i) Appendix A to Part 364 of the FDIC’s Rules and Regulations, 12 C.F.R. Part 364, Appendix A;
(ii) Appendix A to Part 365 of the FDIC Rules and Regulations, 12 C.F.R. Part 365 Appendix A; and
(iii) the Statement of Policy entitled “Interagency Appraisal and Evaluation Guidelines.â€
This information was already out there if you knew where to look. Did you think that your bank would send each depositor a copy of the order to its customers? Do you think they would post a large sign on their front window advising their customers that they have been found to be operating in an unsafe manner? Of course not, they don’t want you to know.
How about Gateway Bank of St. Louis:
On Friday, November 6, 2009, Gateway Bank of St. Louis, St. Louis, MO was closed by the Missouri Division of Finance, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.  No advance notice is given to the public when a financial institution is closed.
Did Gateway tell their customers that they were slapped with FDIC civil fines?
(excerpt from FDIC notice dated June 10, 2009)
…the Bank entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO PAY CIVIL
MONEY PENALTY (“CONSENT AGREEMENT”) with a representative of the Legal Division of the FDIC, whereby the Bank, solely for the
purpose of this proceeding and without admitting or denying any violations, consented to the issuance of an ORDER TO PAY CIVIL
MONEY PENALTY (“ORDERâ€) by the FDIC and agreed to pay a civil money penalty in the amount of $2,500 to the Treasury Department
of the United States.After taking into account the CONSENT AGREEMENT, the appropriateness of the penalty with respect to the financial
resources and good faith of the Bank, the gravity of the violations by the Bank, the history of previous violations by
the Bank, and such other matters as justice may require, the FDIC considered the matter and determined it had reason to
believe that the Bank engaged or participated in violations of law and regulation for which it is appropriate to assess a civil money penalty of $2,500 against the Bank.
You say $2,500 does not sound like much. True, it is peanuts of a fine but a cival penalaty is still a serious matter and Gateway had been fined other times as well for other violations of the Federal Deposit Insurance Act. If I was shopping for a bank I would not want to put my money in an institution that keeps getting slapped with cival penalities. And of course the bank never tells you about them.
You get the idea here. How about Prosperan Bank which also failed yesterday…
On November 6, 2009, Prosperan Bank, Oakdale, MN was closed by the Minnesota Department of Commerce, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.  No advance notice is given to the public when a financial institution is closed.
Excerpts from FDIC order dated September 10, 2009
In the Matter of
PROSPERAN BANK
OAKDALE, MINNESOTA
ORDER TO CEASE AND DESIST
IT IS HEREBY ORDERED that the Bank, its institution-affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns, cease and desist from the following unsafe or unsound banking practices:
A. Operating with a board of directors and management that failed to implement adequate policies and practices for the prudent operation of the Bank.
B. Operating with inadequate capital and an inadequate allowance for loan and lease losses for the volume, kind, and quality of loans and leases held, and/or failing to make provision for an adequate allowance for possible loan and lease losses.
C. Operating with inadequate liquidity in light of the Bank’s asset and liability mix.
D. Operating with an excessive level of adversely classified loans or assets, and/or delinquent loans and/or nonaccrual loans.
E. Engaging in hazardous lending and lax collection practices.
F. Operating with inadequate earnings.
IT IS FURTHER ORDERED, that the Bank, its institution-affiliated parties, and its successors and assigns, take affirmative action
While not all bank failures will have had previous slaps on the wrist it is still revealing that some of these institutions were already warned that they were in violation of FDIC regulations and in some instances the violations were very serious.
Does your bank show up on the publically available FDIC list of actions taken? If so you just may want to print out a copy and take it to your bank and ask the manager if the bank has rectified the conditions identified by the FDIC. Chances are that not even the local branch manager will be aware of the FDIC orders but at least you can ask.
What is the real point of this article? The point is we will spend months researching different makes and models of cars before making a purchase or check with consumer reports before buying a microwave oven, but when it comes to banks we will just go to whoever is offering free checking or a free toaster without knowing anything at all about them. We don’t know anything of their financial health, previous violations, or even cease and desist orders that they may be operating under. We simply hand over our paychecks (for those who still get one) and hope the money will be safe.
Take the time to know your bank, find out if they have been issued cease and desit orders for unsafe banking practices, or any other violations for that matter. Of course some banks will go on to correct their problems and be fine in the long run. But you do have a choice where you put your money and I for one would want to know if my bank has ever been slapped with a cease and desit order by the FDIC, especially for unsafe banking practices.
And remember to never have more than $250,000 at any one financial institution, this way you stay inside the FDIC insurance limits.
By the way… I still boycott ‘any‘ institution that has received tax payer bailout funds.
Sphere: Related Content
0 Comments