U.S. problem banks rise to 171 at end of third quarter
That is quite a leap from 117 during this period of unprecedented bailing out of all sorts of financial institutions.
News:
The number of problem U.S. banks and thrifts jumped in the third quarter to 171, from 117 at the end of the prior quarter, marking the highest level since the end of 1995 and adding to expectations that more banks will fail, regulators said on Tuesday.
Source: Reuters
Freedom Bank of Florida is the 17th U.S. bank failure of the year
Almost like clockwork that we see a bank failure at the closing of the day on Friday. Freedom Bank of FL has been shut down by the FDIC. At the time of the closing they had $254 million dollars in deposits. These customer deposits have been purchased by the Fifth Third Bank. Of the $287 millon in assets, Fifth Third will purchase only $32 millon of them and the FDIC will be retaining the rest.
FDIC Release:
Freedom Bank, Bradenton, Florida, was closed today by the Commissioner of the Florida Office of Financial Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Fifth Third Bank, Grand Rapids, Michigan, to assume all of the deposits of Freedom Bank.
Georgia’s Alpha Bank & Trust is 16th U.S. Bank Failure in 2008
Another one bites the dust…….. Alpha had $346 million dollars in customer deposits at the time. This marks the 16th failure this year. Streans Bank of Minnesota will assume the deposits for this failed bank.
FDIC Release:
Alpha Bank and Trust, Alpharetta, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St. Cloud, Minnesota, to assume the insured deposits of Alpha Bank & Trust.
13th U.S. Bank Failure of this year - Main Street Bank of Northville, Michigan
Another small bank has gone bust. They had about $17 million in assets which were acquired in full by Monroe Bank & Trust. With the Treasury’s statement that they were going to only bailout “healthy” banks I would assume that means many smaller banks will be allowed to fail because they are not critical for our financial system or in laymen terms “too big to fail”.
FDIC Press Release:
Main Street Bank, Northville, Michigan, was closed today by the Michigan Office of Financial and Insurance Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC approved the assumption of all the deposits of Main Street Bank, by Monroe Bank & Trust, Monroe, Michigan.
All depositors of Main Street Bank, including any with deposits in excess of the FDIC’s insurance limits, will automatically become depositors of Monroe Bank & Trust, and they will continue to have uninterrupted access to their money. Depositors will still be insured with the new institution. Therefore, there is no need for customers to change their banking relationship to retain deposit insurance.
FDIC seeking temporary unlimited Treasury loans for bank deposits
Well this is pretty serious to have our depositor protection agency now asking for such unprecedented power to protect depositors. This begs me to wonder if we have a wave of banks failures about to happen and they are trying to get authority in place to stem the losses that may occur when we have multiple banks failing. I believe we should project the depositors but giving unlimited authority to anyone has no place in our democratic republic. The pressure is now on and we need to let our representatives know, now is not the time to panic because things they could do in these times will create a bigger mess that we will need to take a decade or more to correct. By socializing all these losses you just create price inflation and in the end the same fate will cover us all.
Press Release:
The Federal Deposit Insurance Corporation is seeking temporary unlimited borrowing authority from the Treasury Department, according to a copy of the final Senate bailout legislation on Wednesday.
In the bill, which is expected to be voted on by the Senate later Wednesday, the FDIC is seeking the borrowing authority through the end of 2009.
Ameribank of West Virgina is the 12th bank failure of 2008
Like clockwork, FDIC announced their 12th failed institution of 2008 in the W. VA bank of Ameribank on Friday after the stock market close. At the time of the failure they held assets of $115 million dollars and $102 million in deposits along with 8 branches (3 in Ohio and 5 in West VA). Their assets are being taken over by Pioneer Community Bank and Citizens Savings Bank. FDIC stated the Ohio branches will open on Saturday and the Virgina branches on Monday morning.
FDIC Press Release:
Ameribank, Inc., was closed today by the Office of the Thrift Supervision and the Federal Deposit Insurance Corporation (FDIC) was named receiver. The FDIC entered into purchase and assumption agreements with Pioneer Community Bank, Inc., Iaeger, West Virginia, and The Citizens Savings Bank, Martins Ferry, Ohio to take over all of the deposits and certain assets of Ameribank, Inc., Northfork, West Virginia.
Ameribank has five branches located in West Virginia and three branches located in Ohio. Pioneer Community Bank, Inc., Iaeger, West Virginia will assume all deposits for the five branches located in West Virginia. The Citizens Savings Bank, Martins Ferry, Ohio will assume all deposits for the three branches located in Ohio.
WaMu on auction block, Goldman hired on for sale as FDIC shops bank around
Well is has been rumored for some time now. With Goldman Sachs hired on with assistance of the FDIC to find a suitor for the nations largest deposit savings bank. The Texas Pacific Group has giving their blessing for a sale after investing $1.5 billion dollars into Washington Mutual in April of 2008.
I have heard estimates that they have $19.5 billion dollars of mortgages on their books with many of them being Option-ARM which are resetting to payments the borrowers can not afford. At the time of this writing, WaMu has a market capitalization of $3.43 billion dollars that make this a difficult situation with no silver linings. This is sad because I personally use WaMu for one of my accounts and I do like their customer service.
Article:
Washington Mutual appeared closer to finding a new owner Wednesday. The Seattle bank hired Goldman Sachs to explore a possible sale, while news reports said federal regulators recently approached Wells Fargo, J.P. Morgan Chase, and others about a possible buyout should WaMu fail.
Goldman reportedly has been shopping the bank around for several days and has approached Wells Fargo, HSBC, Citigroup and J.P. Morgan Chase, among others, about a possible deal.