Posts Tagged ‘DIF’

“Georgia’s Banks Continue To Fail”

Unbelievably, two more banks fail in Georgia!

On Friday, five more banks failed and were taken over bringing the year’s total to 38 closures by the FDIC.

The five closed last Friday brought July’s total to seven equalling June’s total. This is only the second time in 2012 that five banks were seized in a single week.

But the big news was the loss of two more Georgia banks, the seventh and eighth this year and the 83rd failure in Georgia since the crisis began in 2008.

Georgia’s the worst, but others are not far behind.

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“The FDIC Again Wields It’s Sword”

On Friday the FDIC closed five more banks!

That’s the most banks closed in one week since April 29, 2011 — one full year ago.

Bank foreclosures had slowed dramatically in the past six months. Only one was closed in April until Friday’s foreclosures. Only five were closed in March and four in February.

So what has changed?

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“Bank Foreclosures Take A Holiday!”

Until Friday there had been no foreclosures in over a month.

On Friday the FDIC closed three banks, the first to be closed in 2012.

Notably, the three banks seized on Friday included number 75 in Georgia and number 54 in Florida. The First State Bank in Georgia cost the Deposit Insurance Fund $216 million. The cost of the other two were of little significance comparatively.

The year ended with the loss of 92 banks, less than each of the previous two years. Since the crisis began in January, 2008, 417 banks have fallen including the three new ones on Friday.

But the question is, as we start a new year of foreclosures, how many banks can Georgia and Florida lose before it becomes an extreme crisis in each state? How much money should be poured into these failed banking systems from the Fund, and eventually taxpayers, before the bleeding is stopped.

Another question is where would we be if there were no FDIC; a government created safety net established by the Glass Steagall Act in 1933? The legislation separated the banks into two types — commercial banks (safe depositories) and investment banks (risk elevated) which protected the banking system and responsible Americans for more than 68 years.

The third question — why haven’t any of these shady bank executives gone to prison?

These are questions the American people should be asking.

Maybe the time has come to Occupy the FDIC?

I’m just saying.

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“More Georgia Banks Succumb”

Two more Georgia banks failed on Friday!

With the failure of the 72nd and 73rd banks since the banking crisis began Georgia’s banking system remains extremely vulnerable.

Florida lost another bank, the 12th this year and number 52 since the crisis began. Florida remains 2nd to Georgia in bank foreclosures.

A total of 406 U.S. banks have been taken over by the FDIC, and the four lost last week cost the DIF nearly $360 million.

But, the problem brewing in Europe may far exceed our crisis here in the United States.

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“Over 400 Banks Have Fallen”

Since 2008 over 400 banks have been closed by the FDIC!

On Friday, another Georgia Bank was shuttered by the Federal Deposit Insurance Corporation along with three others, including another in Illinois.

What began with the closure of Douglass National Bank in Kansas City, Missouri on January 25th of 2008 has now spread to over 40 states and 402 banks.

The 400th bank to be seized was Blue Ridge Savings Bank in Asheville, North Carolina. It was also the 78th of the 80 closed this year. Country Bank in Aledo, Illinois was the 80th and the 41st in Illinois since the crisis began.

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“Bank of the Commonwealth Closes In Virginia”

Cantor’s state loses its second bank this year!

The Bank of the Commonwealth, Norfolk, Virginia was closed by the FDIC on Friday. It was only the second bank closed in Virginia this year and the 72nd bank closed in 2011.

But, the Virginia bank will cost the Deposit Insurance Fund (DIF) $268.3 million. And, the FDIC entered into a loss-share agreement with Southern Bank and Trust, the acquiring bank, of $798.2 million dollars.

Only 12 banks have been seized in August and so far in September, but there is one week left in the month.

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“Georgia Loses 67th Bank”

Two more Georgia banks failed last Friday!

Since banking crisis began in January of 2008, the FDIC has taken over 377 banks.

Besides the two Georgia banks closed on Friday, the FDIC shuttered another bank in Florida and one in Arizona, the 55th bank closed this year. The two banks were the 15th and 16th closed in Georgia this year and the 67th since the crisis began.

The cost to the Deposit Insurance Fund this week was only $129.3 million which isn’t too bad, but every week the Fund gets hit depletes it.

Losing seven banks, compared to last year’s losses, doesn’t seem to bad. The improvement is welcome bu, seven in the first two weeks of July is just short of the losses for May and June.

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“Bank Foreclosures On the Rise!”

Foreclosures have been benign for the last two months.

On Friday the FDIC took over three more banks including another in Illinois. Two banks were also closed in Colorado bringing the 2011 total to 51.

In May and June only 9 banks were taken over by the FDIC.

But during that time Georgia lost four more banks, the 10th through the 13th this year and 65 since the crisis began. Florida also lost two, its 5th and 6th of the year and 51st since January of 2008.

The two months only cost the Deposit Insurance Fund $523.5 million which was great news compared to the weekly numbers over the last few years.

So, is the increase in July a sign that things are reversing? The three banks seized on Friday will cost the DIF $590.4 million—we’re back to half-a-billion dollars again. More than the total of the previous two months.

Despite the two good months, banks are still in jeopardy given the fragility of the economy and the markets. A downturn in the markets, increased unemployment, problems in China or Europe, or more devastating natural disasters could have an adverse effect on the banking system.

So banks are still something we should watch and be concerned about.

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“Two More Banks Fall in Georgia”

On Friday, Georgia lost two more large banks to foreclosure.

Atlantic Southern Bank and First Georgia Banking Company were seized by the FDIC and became the 62nd and 63rd banks closed in Georgia since the banking crisis began.

A third closure, the first of the year in Washington, was the 43rd bank foreclosure this year and only the fourth bank to fall in May.

Bank failures have slowed compared to last year but there are still some concerns: the cost of the foreclosures to the FDIC’s Deposit Insurance Fund, the continued closures in Georgia, and the level of the loss-share provisions afforded assuming banks.

The three banks closed on Friday will cost the DIF over $445 million, $430 million of that from the two Georgian banks. With the cost of these new Georgia take-overs, the Peach State has cost the Fund over $1.3 billion this year alone.

In addition, the loss-share is an extraordinary $1.15 billion for just three banks.

Since the crisis began in 2008, a total of 365 banks have succumbed to this modern banking crisis which is far from over. Each bank foreclosure has an undetermined, but probably negative, affect on our financial recovery.

You can track the banking crisis in several ways including the FDIC Foreclosures Category here on The Cutting Edge Blog.

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“Bank Foreclosures Accelerate”

Without fanfare five more banks fail and are seized by the FDIC.

Georgia and Florida are again ravaged by the FDIC on a Friday afternoon. They each lost two banks, Georgia their 60th and 61st and Florida, the 48th and 49th.

The FDIC, through April, has closed 39 banks, ten of them in the Peach State. Georgia leads the nation in bank failures, a result of lax regulation and capital requirements.

Florida, number two in lost banks since the crisis began, has lost only 4 this year attributed to poor lending practices and over-leveraged balance sheets.

The Wall Street Journal continues to track bank failures since the beginning of the crisis in 2008, tracking all 361 failures.

The FDIC had to pay $643 million from the Deposit Insurance Fund (DIF) for the five banks closed on Friday, the 29th. Over $400 million for the two Georgia banks and $245 million for the other three banks in Florida and Michigan.

Georgia has cost the DIF $875 million this year. By comparison, Silverton Bank in Atlanta, closed by the FDIC on May 1 of 2009, cost the fund approximately $1.3 billion so Georgia banks have taken their toll on the Fund.

Adding to Alabama’s recent catastrophe, two Birmingham banks were closed by the FDIC just two weeks before the devastation of the tornadoes. Both were relatively large banks, costing the DIF $435 million.

April ended with only 13 banks failing, much better than the 23 that were taken over in the same month last year. But, only eight were closed in April, 2009.

The acceleration in the second half of the month is disconcerting. Eleven were closed on the last two Fridays of the month, excluding Good Friday.

Tomorrow will be the first Friday of May which will give us an indication of the continued acceleration or a slow down.

This is a development that we need to continue to watch.

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