Posts Tagged ‘take-overs’

“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 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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“Eight Banks Fail in April”

After a mild March six banks were closed on Friday!

Only three banks were closed by the FDIC in March, but the wind changed in April and bank closures increased dramatically. Eight banks have been seized by the FDIC in April with two Friday’s remaining in the month.

Georgia lost two more banks—the 7th and 8th of the year—and has now lost 59 banks since the crisis began. Illinois lost one in February, one in March, and now one in April for its 43rd lost bank, just 4 away from Florida with 47.

Are bank foreclosures, again, going to be a problem?

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“Four More Banks Fail on Friday”

Two more Georgia and two more California banks are taken over.

Georgia lost their 5th and 6th banks this year—California their 2nd and 3rd in 2011.

Since the bank crisis began in 2008 Georgia has now lost 57 banks. Though still fourth, California extended its total to 35 with the loss of the two this week, but remains behind both Florida and Illinois in bank foreclosures.

Another $267.6 million was drained from the DIF for the four losses on Friday and the loss-share is a heavy $670.5 million. The FDIC is also going to retain $28.5 million in assets from Charter Oak Bank in Napa for later disposition.

The ‘problem bank’ list for last quarter should be released this week and will indicate the direction the banking crisis is heading.

Anything over last quarter’s 860 troubled institutions would be a negative and not bode well for the nation’s banking system.

An interesting and important point has resurfaced in the banking debate that should be aggressively discussed with renewed interest and action.

Hundreds of banksters were indicted and incarcerated for their parts in the Savings & Loan crisis. To date, not one—not a single executive—has gone to prison as a result of this banking crisis.

It appears Shiela Bair and the FDIC are too weak or lack the desire to bring these criminals to justice.

Is it the Department of Justice’s obligation to bring charges against these criminals?

Are they doing their job? Or is this just another failure of another weak administration?

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“The Contagion In Georgia Spreads!”

Two more Georgia banks were seized by the FDIC on Friday!

American Trust Bank in Roswell and North Georgia Bank in Watkinsville were the third and fourth taken-over by the Georgia Department of Banking and turned over to the FDIC this year.

North Georgia Bank was the 55th Georgian bank closed since the crisis began. Illinois also lost its 40th this week. Community First Bank, Chicago was the 14th bank closed in 2011.

With the three foreclosures in Georgia and Illinois the big four, which includes Florida and California, account for 52% of the 333 banks closed since the crisis began. The four states have lost 174 banks in the three years and one month.

The banking crisis shows little sign of slowing as banks continue to have problems with their balance sheets and capital requirements after years of ignoring the fundamentals of finance or suffering from the downturn caused by the Big Banks that were bailed out by the Treasury Department.

As a result the Deposit Insurance Fund of the FDIC continues to be stretched, with expenses outpacing the inputs from member banks.

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”Georgia Still Leading In Foreclosures!”

The FDIC closed four banks on Friday; another in the state of Georgia.

Georgia lost it’s 53rd bank on Friday as the devastation of the Georgia banking system continues unabated. The 52nd Georgian bank was closed just last week.

No buyer was found for Enterprise Banking Company in McDonough so the FDIC closed the bank and created the Deposit Insurance National Bank of McDonough to allow customers access to their insured deposits.

Customers will receive all of their insured funds from the DINB. This allows depositors continuing access to their accounts during the transition.

Enterprise is estimated to cost the Deposit Insurance Fund $39.6 million.

The Carolinas’ each lost a bank last Friday and the fourth take-over was United Western Bank in Denver, Colorado. Neither Colorado nor North Carolina lost banks in 2010 and prior to Friday had only lost three and two respectively since the crisis began back in 2008. South Carolina has now lost five during the crisis.

United Western was the 7th foreclosure this year and the 329th since January, 2008. There were 9 foreclosures at this time last year. It was the largest of the four banks and will cost the DIF $312.8 million of the $454.9 million hit to the Fund this week.

The loss-share story continued with agreements between the FDIC and the three assuming banks totaling nearly $1.5 billion with the Denver agreement over $1.1 billion of that total.

The 2011 foreclosures are on track with last year which had 157 banks seized by the FDIC, 17 more than 2009.

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