Friday Massacre: Bank Seizures 41-45
Congratulations to the 5 lucky ducks who managed to capture the attention of the FDIC:
“Five U.S. banks with total assets of about $1.04 billion were seized by regulators, pushing this year’s tally of failures to 45 as a recession drives up unemployment and home foreclosures.
Community Bank of West Georgia, in Villa Rica, Georgia; Neighborhood Community Bank of Newnan, Georgia; Horizon Bank of Pine City, Minnesota; MetroPacific Bank of Irvine, California; and Mirae Bank of Los Angeles were closed yesterday by state regulators, according to statements from the Federal Deposit Insurance Corp. The FDIC was named receiver of the four banks.
Wilshire Bancorp’s Wilshire State Bank will take over all of Mirae’s $362 million in deposits, and will purchase $449 million of assets, the FDIC said in a statement.
Sunwest Bank of Tustin, California, acquired most of MetroPacific’s $73 million in deposits and $80 million in assets, the FDIC said. Stearns Bank of St. Cloud, Minnesota, bought Horizon Bank’s $69.4 million of deposits. Stearns will purchase $84.4 million of Horizon’s assets, the FDIC said.
The FDIC didn’t find a buyer for Community Bank of West Georgia, and said it will mail checks to reimburse insured depositors. The bank has deposits of $182.5 million. Charter Financial Corp.’s CharterBank will assume Neighborhood Community Bank’s $191.3 million of deposits and purchased some assets in a loss-share agreement with the FDIC, according to the agency.
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Source:
Five Banks Are Seized, Raising U.S. Failures This Year to 45
Margaret Chadbourn
Bloomberg, June 27 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCbHA.m7rikc
June 27th, 2009 at 7:57 am
See how uneventful it is when a bank not too-big-to-fail gets into trouble. This is the way it is supposed to work; however, the financial elites don’t want to hear it.
The world, both here and abroad would be a lot better off if we could figure out a way to breakup these goliaths; but, it will never happen. They are now too entrenched both financially and politically. The virus has already taken over the host.
June 27th, 2009 at 8:11 am
The FDIC has done a nice job of taking over the small banks when they appear insolvent. Yet I’m amazed that they didn’t have the power to do the same to Citi, BoA, etc. I’ll say the final tally of banks shut down by year end will be 71 banks. Anyone else have a guess? Barry?
June 27th, 2009 at 8:14 am
I think at some point we’re going to see explosive growth of the number of small- mid size banks failing, they aren’t immortal like the Gang of 19
June 27th, 2009 at 8:15 am
I have been reading some about the energy carbon credit bill passed by the house last night. Energy costs are going up. One problem I have with this is that people who make less money will be reimbursed for the costs of the increases in energy by rebates from the government.
It seems many of the ideas that Obama presents has the government as our partner, to “help” us along, when the legislation is written so that we are more and more easy with the idea that government subsidies to us as individuals are ok…medicare drug bill under Bush, energy carbon credits under Obama.
And yet, these are still mainly poorly thought out ideas. Are we making Social Security less of an unseen tax on future generations? NO. We haven’t made the contributions by the individual worker apply to his/her retirement or disability the way it should be…no, we are still having this crop of workers pay for the last generation of working stiffs…
Government is becoming larger and larger, and by doing so, is more and more of a burden. Simply because of its size and cost. We have seen that of the last 3.5 million jobs created, only about 1 million were private sector jobs and the rest were taxpayer dependent public jobs. Whether you think socialism or bigger government is good or not, the size of this behemoth, and the sheer cost of it are becoming greater every year. It isn’t a government backstop any more the way FDR and congress thought about social security, it is government intrusion, by both parties, but it is accelerating rapidly under the current administration.
June 27th, 2009 at 8:18 am
Mr Mortgage has stated that there is a shadow inventory of 800K bank owned homes (60K in CA alone) just wondering how long they can carry this burden.
I still think there will be a US super agency created to help out the banks, but these homes at a fair price. Fair price in the same sense that the warrants held by the US for TARP will get a fair price, the banks will determine what fair is, of course!
June 27th, 2009 at 8:49 am
Most men lead lives of quiet desperation and go to the grave with the song still in them. Henry David Thoreau.
Our government seems determined to play to the fears of these quietly desperate individuals. Both parties. People who make their own way in life will just have to understand that some will always need to feel the caressing hand of government, for they cannot make their own way. It will always be so.
June 27th, 2009 at 9:09 am
jc,
good points, both, ‘marked increase in ‘Failure’ of little Banks — remember Whalen’s apt headline: “Tough Tootsies, Little Banks”, and ‘fair pricing’ — let us remember, as well, TARP was sold, to the ‘Cained Peep, the same way Operation Iraqi Liberation (OIL) was, “it will pay for itself, maybe, even show a profit..”.
How quickly that Line hit the Memory Hole..
The Bank repurchase of TARP Warrants is, yet, another story our ‘Watchdog Media’ has, casually, slept through..
~~
Bruce,
nice take, should remind peep why our Founders were unenthusiastic about Democracies, and with that understanding, created a Republic. A Democracy is something we have Never been, unless, of course, one is instructed by the, current, USGov, NPR, MSM y the rampant virus of general ignorance..
http://legal-dictionary.thefreedictionary.com/Republic
http://legal-dictionary.thefreedictionary.com/Democratic+Republicans
June 27th, 2009 at 9:21 am
NEW YORK (MarketWatch) — Dresdner Kleinwort Securities has withdrawn from the Federal Reserve’s primary U.S. government security dealers, the U.S. central bank said Friday.
The change is net neutral in terms of numbers as a new dealer just came online, but in general this is a major net negative for the Treasury market.
Why? Because being a primary dealer is, in general a license to print money. You get to field customer orders for Treasuries and make your spread, and you have a privileged trading position with The Fed.
There’s only one fly in the ointment, and that is that the position comes with a requirement that you bid. This is distinct from most other nations where no such system exists, and essentially guarantees that there can never be a “failed” Treasury auction.
There was no reason cited for the withdrawal but one can surmise that the issue is that they’re stuffed to the gills with Treasuries and are finding it difficult or impossible to earn their spread, think there is a material safety risk in their participation (e.g. getting stuck long with a deteriorating position), or both.
Either way there is no possible means to read this as bullish. While the issue may be with their liquidity demands and thus not reflect severely on the Treasury market with the issuance that has gone on this year and will for the foreseeable future
June 27th, 2009 at 9:27 am
http://www.youtube.com/watch?v=DaDo9PyCeLQ
Money quote at 1:44
June 27th, 2009 at 9:29 am
Looks like the esteemed Ms. Bair, chair of the FDIC, can’t sell her own home after reducing the price several times! http://contraryriches.blogspot.com/
June 27th, 2009 at 9:33 am
Mark-
I haven’t seen anyone reference the original acronym to the Iraq gambit for a long time. Those people had such dogged determination in pursuing their uncontrollable desire to exteriorize the pyschic FUBAR reality they were living. They couldn’t hide what they were up to, but they were able to talk a lot of people into not paying attention. What the furry Jesus were they/we thinking?
All this energy to stop price discovery. Anyone see the Dresdner withdrawal? Important? Is that a precursor to the appearance of US bonds denominated in other currencies? How long will the illusion of value hold the dollar together?
Also, why is the Brazilian real strengthening so much? Contemporaneous to a significant drive to expand credit and the monetary base…Are the banksters fixing to corral the real and fatten it up to spur consumption in Brazil?
Aprueban “privatizar” tierras amazónicas
http://www.bbc.co.uk/mundo/america_latina/2009/06/090626_0453_lula_selva_amazonica_irm.shtml
June 27th, 2009 at 9:49 am
MR–
Brazil, and the Real has been The trade since October–Emerging Economy, no Net Oil dependence, with a positive Trade Balance, is all one needed to Understand..
re: denomination of future UST offerings, ‘Yankee’ bonds are going to receive a whole new definition..
http://www.finance-lib.com/financial-term-registered-bond.html
June 27th, 2009 at 10:43 am
@B in Tn: Liked your 8:15 post. But not sure your base line for making it.
Have you read the Rolling Stone article on GS? Or the De Fazio opinion of the “Energy” bill passed narrowly by the House?
It’s like we’re watching our own disembowelment, helpless to defend ourselves.
June 27th, 2009 at 10:54 am
One statistic that sticks in my craw relative to Bruce’s posting is that the SEC has $3,500 employees.
WTF do they do all day? Network with Wall Street for their next banking job?