FDIC Friday - 2 more banks fail

California, Georgia banks are latest to be seized
By John Letzing, MarketWatch
Last update: 8:14 p.m. EST Feb. 6, 2009

SAN FRANCISCO (MarketWatch) -- Federal regulators shut down a bank in Southern California and another in the Atlanta area on Friday, bringing the number of U.S. failures this year to eight, while marking the 33rd collapse since the recession began.

McDonough, Ga.-based FirstBank Financial Services and Culver City, Calif.-based Alliance Bank were seized, according to the Federal Deposit Insurance Corp.

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3 More Banks Fail Today

Per the FDIC website:

Ocala National Bank, Ocala, FL
Suburban Federal Savings Bank, Crofton, MD
MagnetBank, Salt Lake City, UT

Day the banks were just three hours from collapse

Revealed: Day the banks were just three hours from collapse

By Glen Owen
Last updated at 11:21 PM on 24th January 2009

The Bank of England

Narrow escape: The Bank of England was forced to contact RBS's creditors abroad to persuade them not to withdraw their funds

Britain was just three hours away from going bust last year after a secret run on the banks, one of Gordon Brown's Ministers has revealed.

City Minister Paul Myners disclosed that on Friday, October 10, the country was 'very close' to a complete banking collapse after 'major depositors' attempted to withdraw their money en masse.

The Mail on Sunday has been told that the Treasury was preparing for the banks to shut their doors to all customers, terminate electronic transfers and even block hole-in-the-wall cash withdrawals.

Only frantic behind-the-scenes efforts averted financial meltdown.

If the moves had failed, Mr Brown would have been forced to announce that the Government was nationalising the entire financial system and guaranteeing all deposits.

But 60-year-old Lord Myners was accused last night of being 'completely irresponsible' for admitting the scale of the crisis while the recession was still deepening and major institutions such as Barclays remain under intense pressure.

The build-up to 'Black Friday' started on Monday, October 6, when the FTSE 100 dropped by nearly eight per cent as bad news on the economy started to multiply.

The following day, Chancellor Alistair Darling began all-night talks ahead of an announcement on the Wednesday that billions of pounds of taxpayers' money would be used to pour liquidity into the system.

But shares continued to plummet, turning into a rout on the Friday when the FTSE crashed by ten per cent within minutes of opening.

Both Royal Bank of Scotland and HBOS were nearing complete collapse - but Lord Myners, who built up his fortune during a long career in the City, said the problems ran far wider.

'There were two or three hours when things felt very bad, nervous and fragile,' he said. 'Major depositors were trying to withdraw - and willing to pay penalties for early withdrawal - from a number of large banks.'
Lord Myners

Lord Myners: 'There were two or three hours when things felt very bad, nervous and fragile'

The threat to the system was so severe that the Bank of England was forced to contact RBS's creditors in New York and Tokyo to persuade them not to withdraw their funds, but it is not known which other banks faced a run on their reserves.

'We faced the very real problem of how banks could stop depositors from withdrawing their money,' a Treasury source said yesterday.

'The banks themselves were selling their shareholdings, accelerating the stock-market falls, and preparing to shut up shop. Mortgages would have been sold on and savers would have been spooked, to put it mildly. It would have been chaos.'

After a weekend of crisis talks, which concluded at dawn on the Monday, it was announced that Lloyds TSB was taking over HBOS, supported by £17billion of taxpayers' money, and RBS would receive an injection of £20billion - prompting the resignation of RBS's infamous chief executive, Sir Fred 'the shred' Goodwin. Share prices at last started a small rally.

Ruth Lea, economic adviser to the Arbuthnot Banking Group, said last night that it was 'highly irresponsible' for Lord Myners to reveal the scale of the problems because it could serve to further wreck already fragile levels of confidence.

'We are not out of the woods yet,' she said. 'I fear for Barclays, after the fall in its share price, and Lloyds has been damaged by the HBOS takeover.'

She added: 'If it was panning out in that way, then the Government would have had no choice but to step in and nationalise the entire financial system.'

Angela Knight, chief executive of the British Bankers Association, said: 'The issues related only to HBOS and RBS. To imply that all the banks would have gone under is wrong. It is complicated.'

Lord Myners also said that bank executives had been 'grossly over-rewarded' during the 'golden days' of big bonuses. 'They are people who have no sense of the broader society around them,' he said. 'There is quite a lot of annoyance and much of that is justified.'


Find this story at www.dailymail.co.uk/news/article-1127278/Revealed-Day-banks-just-hours-collapse.html

Another Bank Bites the Dust

California-based 1st Centennial Bank fails
By MarketWatch

Last update: 1:13 a.m. EST Jan. 24, 2009
SAN FRANCISCO (MarketWatch) -- 1st Centennial Bank of Redlands, Calif. was seized by the Federal Deposit Insurance Corp. and state regulators on Friday. It was the third bank failure this year, and brings to 28 the number of banks that have closed since the beginning of the current credit crisis.
First California Bank, based in Westlake Village, Calif., will assume the bank's insured deposits, the FDIC said in a statement.

The six branches of 1st Centennial will reopen on Monday as branches of First California Bank. Depositors of the failed bank will automatically become depositors of First California.
As of Jan. 9, 1st Centennial had total assets of $803.3 million and total deposits of $676.9 million, of which there were approximately $12.8 million that exceeded the insurance limits. 1st Centennial also had approximately $362 million in brokered deposits that are not part of Friday's transaction. The FDIC said it will pay the brokers for the amount of their insured funds.

The FDIC said First California agreed to assume the insured deposits for a 5.29% premium. It will also purchase approximately $293 million of the failed bank's assets. The assets are mainly cash, cash equivalents and marketable securities. The FDIC will retain the remaining assets for later disposition.

The cost to the FDIC's Deposit Insurance Fund is estimated to be $227 million. End of Story

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Depositors lose 39 million with Bank Closure

If they had their money in gold or silver they would be okay. I know I keep driving this point home - and that I'm preaching to choir most of the time - but we need to expose these risks to our loved ones so they don't become victims too.

Bank of Clark County to reopen as Umpqua
Portland Business Journal
Monday, January 19, 2009, 2:08pm PST | Modified: Monday, January 19, 2009, 4:59pm

Following state and federal regulators’ takeover of Bank of Clark County on Jan. 16, the Vancouver bank’s two branches will open on Tuesday as new branches of Umpqua Bank.

Umpqua Holdings Corp. (NASDAQ: UMPQ), the Portland-based parent of Umpqua Bank, agreed to take the insured deposits of Bank of Clark County, as well as the locations, at the request of the Federal Deposit Insurance Corp. and the Washington Department of Financial Institutions.

The state agency said regulators decided to close the bank because it had inadequate capital and liquidity. Bank of Clark County had $446.5 million in assets as of Jan. 13.

The bank had $39.3 million in uninsured deposits in approximately 138 accounts, out of total deposits of $366.5 million. An account owner can have up to $250,000 in FDIC-insured deposits at any bank. Anything over that is uninsured.

The uninsured deposits are under the FDIC’s control. The people or businesses that placed the deposits at Bank of Clark County will become creditors of the Bank of Clark County.

Any deposits in excess of $250,000 that were placed by public bodies such as city or state government are protected by Washington’s Public Deposit Protection Act.

Umpqua, which received a $214 million investment from the U.S. Treasury as part of its Troubled Asset Relief Program, is taking over about $185 million in insured deposits. The actual cash the bank receives from the FDIC will be net of the assets the bank gets along with Bank of Clark County’s two branches.

“We don’t know the final amount yet,” said Ray Davis, CEO of Umpqua. “We’ll put the cash to work so we can make money.”

Umpqua’s stock rose slightly on the news, to close at $9.38 on Monday, up from $9.16 on Friday. The bank’s stock has traded between $8.57 and $20.35 over the past 52 weeks.

At the end of September, Bank of Clark County’s capital ratio was just below the level of a well-capitalized bank.

But problems at the bank escalated quickly after September, said Brad Williamson, director of the Division of Banks at Washington’s Department of Financial Institutions.

“They had rapid and severe credit problems that were identified late in the year,” Williamson said. “It was surprising how rapidly the deterioration occurred. It was almost unprecedented.”

Last summer, when analysts were beginning to look askance at many banks, Bank of Clark County attracted attention because its level of delinquent loans to total loans was high. Analysts also wondered whether the bank had sufficient reserves to cover its delinquent loans.

At the end of September, 79 percent of the bank’s loans were in real estate. The decline in house prices has hit Clark County harder than Portland, largely because houses closer to city centers have been selling more quickly and for better prices than equivalent houses that are further from commercial centers.

The liquidity problems mentioned in public statements weren’t as extreme as the runs on deposits that California-based IndyMac or Seattle-based Washington Mutual experienced.

But in the last few days before regulators took it over, Bank of Clark County did have “major issues of that nature,” Williamson said.

“I think somehow word got out that they were having problems over the last day or two.”

One liquidity issue was the high percentage of brokered deposits that Bank of Clark County had.

Out of $366.5 million in total deposits, the bank had $117.8 million in brokered deposits, or deposits from “non-core” customers who don’t have other business with the bank, such as checking accounts or loans.

Banks normally don’t seek brokered deposits, which they attract by offering high interest rates, unless they lack sufficient deposits from “core” customers.

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The accelerating trend of bank failures

Per the FDIC website here is the number of Bank Failures since the year 2000. Remember, this list does not include those banks that were bailed out when they were technically insolvent.

Year/Bank Failures

2000 - 2
2001 - 4
2002 - 11
2003 - 3
2004 - 4
2005 - 0
2006 - 0
2007 - 3
2008 - 25

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2nd Bank Closure of the Year

FDIC, regulators shut down two banks

By John Letzing, MarketWatch
Last update: 1:57 a.m. EST Jan. 17, 2009

SAN FRANCISCO (MarketWatch) - The Federal Deposit Insurance Corporation and state regulators on Friday shut down banks in Illinois and Washington - the first bank failures of the year and the 26th and 27th since the start of the current credit crisis.

Berkeley, Ill.-based National Bank of Commerce was shut down and he FDIC said Republic Bank of Chicago will assume all of National Bank of Commerce's deposits. The two locations of National Bank of Commerce will reopen Saturday as branches of Republic Bank, the FDIC said.

The last Illinois bank to fail was Eldred-based Meridian Bank, in October, the FDIC said.

National Commerce Bank had total deposits of $402.1 million as of Jan. 7, and total assets of $430.9 million, the FDIC said.
Republic Bank has agreed to buy roughly $366.6 million in National Commerce Bank's assets at a discount of $44.9 million.

The FDIC estimated that the cost of National Commerce Bank's failure to the Deposit Insurance Fund will be $97.1 million.
Also on Friday, the Bank of Clark County, Vancouver, Wash. was shut down and the FDIC was named receiver. The FDIC said Umpqua Bank, based in Roseville, Ore., will assume the insured deposits.

Bank of Clark County had total assets of $446.5 million and total deposits of $366.5 million. At the time of closing, there were approximately $39.3 million in uninsured deposits held in approximately 138 accounts that potentially exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.

Umpqua will not assume the approximately $117.8 million in brokered deposits. The FDIC will pay the brokers directly for the amount of their insured funds. End of Story

John Letzing is a MarketWatch reporter based in San Francisco.

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Illinois-based Nat'l Bank of Commerce closed

The first of the year if you don't count B of A going back for more TARP handouts:

Illinois-based Nat'l Bank of Commerce closed
By John Letzing, MarketWatch
Last update: 7:48 p.m. EST Jan. 16, 2009

SAN FRANCISCO (MarketWatch) -- Berkeley, Ill.-based National Bank of Commerce was closed by regulators Friday, marking the first bank failure of 2009, the Federal Deposit Insurance Corporation said in a statement.

Republic Bank of Chicago will assume all of National Bank of Commerce's deposits, while the two locations of National Bank of Commerce will reopen Saturday as branches of Republic Bank, the FDIC said.

While the bank's failure is the first of this year in the U.S., more than two dozen banks last year succumbed to the ongoing financial crisis. The last Illinois bank to fail was Eldred-based Meridian Bank, in October, the FDIC said.

National Commerce Bank had total deposits of $402.1 million as of Jan. 7, and total assets of $430.9 million, the FDIC said.
Republic Bank has agreed to buy roughly $366.6 million in National Commerce Bank's assets at a discount of $44.9 million.

The FDIC estimated that the cost of National Commerce Bank's failure to the Deposit Insurance Fund will be $97.1 million. End of Story

John Letzing is a MarketWatch reporter based in San Francisco.

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Haven Trust Bank of Duluth, Ga. fails; 24th of year

Haven Trust Bank of Duluth, Ga. fails; 24th of year

By Wallace Witkowski
Last update: 4:53 p.m. EST Dec. 12, 2008

SAN FRANCISCO (MarketWatch) -- The Federal Deposit Insurance Corporation said late Friday that Haven Trust Bank of Duluth, Ga., was closed by the Georgia Department of Banking and Finance. The failure not only marks the 24th bank failure of the year, but the fifth in the Atlanta area. The FDIC was named receiver, and Branch Banking & Trust of Winston-Salem, N.C. will assume the deposits. As of Dec. 8, Haven Trust had total assets of $572 million and total deposits of $515 million. The FDIC said that BB&T agreed to assume all of the deposits for $112,000 and assume all of the failed bank's assets for about $55 million.
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Bank Runs in the Philippines

Herein lies the problem with fractional reserve banking...they only keep a fraction on reserve to cover deposits. If more than 10% of depositors attempt the pull out their money, there will not be any left for them. It is for this reason the FDIC is a major confidence game. The FDIC has less than 1% on reserves against total deposits. My advice? Only keep in the banks what you can afford to lose....

Heavy withdrawals hit Gaisano bank as more banks close

CEBU CITY — Alarmed by the bank holidays declared by rural banks under the Legacy Group, depositors have flocked to a Gaisano-owned bank since Wednesday in a bid to withdraw their money.

Three of the seven branches of the Rural Bank of Subangdaku (RBS) in Metro Cebu and one in Dumaguete City in Negros Oriental suffered from heavy withdrawals since Wednesday, said spokesperson and administrative manager Maritess Obenza.

Despite this, she assured that they had no plan to declare a bank holiday in any of the affected branches.

"The board (of directors) is still meeting on how to address the withdrawals although we have contained these because we were able to explain to our depositors and convince them that there’s no need to panic," Ms. Obenza said.

RBS depositors panicked after rural banks under the Legacy Group declared bank holidays. The affected RBS branches are located near the Legacy banks.

The Bangko Sentral ng Pilipinas Cebu regional office has confirmed that the Pilipino Rural Bank, Inc. and Philippine Countryside Rural Bank, Inc. have declared bank holidays. The Bank of East Asia, formerly Rural Bank of Bisayas Minglanilla, also declared a bank holiday on Wednesday.

All three are under the Legacy Group and covered by a recent Supreme Court ruling that upheld the central bank’s move to close them for capital deficiency.

A fourth bank, the Rural Bank of Bais, also declared a bank holiday on Wednesday. In a notice posted on its doors, the bank said it was waiting for the release of its emergency loan by the central bank.

A source at the Bangko Sentral Cebu office, who asked not to be named, said they were still evaluating the situation at the Rural Bank of Bais and Bank of East Asia as of yesterday.

They have been informed of the heavy withdrawals at the Rural Bank of Subangdaku, but they were confident that the bank was capable of servicing these withdrawals. — Marites S. Villamor

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Story Location: http://www.bworldonline.com/BW121208/content.php?id=023
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FDIC Friday - 23rd bank failure of the year

Georgia bank closed in 23rd failure of year
By John Letzing, MarketWatch
Last update: 5:36 p.m. EST Dec. 5, 2008

SAN FRANCISCO (MarketWatch) -- First Georgia Community Bank was closed by regulators Friday, marking the 23rd bank failure of the year amid the ongoing financial crisis.
The closure also represents the fourth so far this year in the Atlanta area.

The four branches of Jackson, Ga.-based First Georgia will re-open Saturday as United Bank, which has assumed First Georgia's deposits, the Federal Deposit Insurance Corp. said in a statement.

United Bank agreed to assume the deposits for a 0.811 premium, the FDIC said, and it will purchase roughly $60.6 million of First Georgia's assets.
As of Nov. 7, First Georgia had $237.5 million in assets and $197.4 million in deposits, the FDIC said.

The FDIC estimated the closure will cost its Deposit Insurance Fund $72.2 million.
Other banks in the Atlanta area closed this year include Loganville-based The Community Bank, and Alpharetta-based Integrity Bancshares Inc. and Alpha Bank & Trust.

John Letzing is a MarketWatch reporter based in San Francisco.

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The FDIC con game continues...

FDIC Shows Massive Growth In Problem Banks, But The Data Is Still Wishful Thinking

November 25, 2008 11:24 AM EST
StreetInsider.com

Today, the FDIC issued banking data from the third quarter ended September 30, which showed that the number of insured institutions on the FDIC's "Problem List" increased from 117 to 171 and the assets of "problem" institutions rose from $78.3 billion to $115.6 billion during the quarter. The FDIC said this is the first time since the middle of 1994 that assets of "problem" institutions have exceeded $100 billion.

The FDIC said during the third quarter 73 institutions were absorbed in mergers, and 9 institutions failed. This was the largest number of failures in a quarter since the third quarter of 1993, when 16 insured institutions failed. Among the failures was Washington Mutual Bank, an insured savings institution with $307 billion in assets and the largest insured institution to fail in the FDIC's 75-year history. The number of insured commercial banks and savings institutions fell to 8,384 in the third quarter, down from 8,451 at midyear.

The FDIC data also showed that net income of $1.7 billion was the second-lowest since 1990, and loan-loss rates rose to a 17-year high. On a positive note, net interest margins registered improvement.

Like it was in the second quarter (they left-out WaMu), the data the FDIC is issuing on the problem bank assets in the third quarter is misleading. We all know now that Wachovia (NYSE: WB) was near failure at the end of the third quarter and at the very start of the fourth quarter it was merged with Citi (NYSE: C) then later Wells Fargo (NYSE: WFC). Wachovia's assets base would have easily surpassed the $115.6 billion the FDIC mentioned as the total in the problem list. In addition, yesterday Citi (NYSE: C) needed a U.S. government rescue plan. How can it be that this data is so wrong? Is it the fear factor that they feel would be created if they were truthful. Maybe certain institution don't qualify as "troubled" but should. They need to look at how they qualify a troubled bank. Assets of troubled institutions should be in the trillions not $100 billion.

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Yikes! 3 More Banks Fail Today

The most bank failures in one week this year...

FDIC Failed Bank List

PFF Bank and Trust, Pomona, CA
Downey Savings and Loan, Newport Beach, CA
The Community Bank, Loganville, GA

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Security Pacific Bank siezed by FDIC, #19 this year

What happens when the entity insuring your deposit (FDIC) runs out of money? They will not default, of course, they'll simply print more money and steal from you through inflation.

Security Pacific Bank seized by FDIC
By MarketWatch
Last update: 11:04 a.m. EST Nov. 8, 2008

SAN FRANCISCO (MarketWatch) -- The Federal Deposit Insurance Corp. and state regulators seized Los Angeles-based Security Pacific Bank late Friday -- one of two banks to fail that day and the 19th to fail so far this year.

Pacific Western Bank, also based in Los Angeles, will assume all of the deposits of Security Pacific, the FDIC said in a statement.

Also on Friday, Houston-based Franklin Bank SSB was closed by regulators.

The four branches of Security Pacific will reopen on Monday as branches of Pacific Western. Depositors of the failed bank will automatically become depositors of Pacific Western. Deposits will continue to be insured by the FDIC.

As of Oct. 17, Security Pacific had total assets of $561.1 million and total deposits of $450.1 million. Pacific Western agreed to assume all the deposits for a 2% premium, according to the FDIC. In addition to assuming all of the failed bank's deposits, Pacific Western will purchase approximately $51.8 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $210 million. Pacific Western's acquisition of all deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives, according to the statement. Security Pacific is the third bank to fail in California this year.

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Franklin Bank closed, 18th failure this year

FDIC Fridays resume...

Franklin Bank closed, 18th failure this year
By John Letzing, MarketWatch
Last update: 7:41 p.m. EST Nov. 7, 2008

SAN FRANCISCO (MarketWatch) -- Houston-based Franklin Bank S.S.B. was closed by regulators Friday, the 18th bank failure this year amid the ongoing credit crisis.

The Federal Deposit Insurance Corporation said in a statement that Franklin Bank had total assets of $5.1 billion as of Sept. 30 and $3.7 billion in total deposits.

El Campo, Texas-based Prosperity Bank will assume Franklin Bank's deposits for a premium of 1.7%, and Franklin's 46 offices will reopen as Prosperity branches, the FDIC said.

In addition, Prosperity Bank will purchase roughly $850 million of Franklin Bank's assets, according to the regulator.

The FDIC estimated that Franklin Bank's failure will cost its Deposit Insurance Fund between $1.4 billion and $1.6 billion.

Shares of Franklin Bank slid more than 80% lower in after-hours trading, to $0.04 cents.

John Letzing is a MarketWatch reporter based in San Francisco.

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Freedom Bank taken over in 17th failure this year

By John Letzing, MarketWatch
Last update: 6:55 p.m. EDT Oct. 31, 2008

SAN FRANCISCO (MarketWatch) -- Bradenton, Fla.-based Freedom Bank was closed Friday, marking the 17th bank failure so far this year amid the ongoing credit crisis.

The Federal Deposit Insurance Corporation said in a statement that as of Oct. 17, Freedom Bank had $287 million in total assets and $254 million in total deposits.

Freedom Bank's four branches will open Monday as branches of Fifth Third Bank, which has assumed Freedom Bank's deposits, according to the regulator.

Fifth Third agreed to assume Freedom Bank's deposits for a premium of 1.16%, and will purchase roughly $36 million of its assets. The FDIC also said it will retain the remaining assets.

The FDIC estimates the cost of the failure to its deposit-insurance fund will be between $80 million and $104 million. End of Story

John Letzing is a MarketWatch reporter based in San Francisco.
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Alpha Bank closed, 16th failure this year

Alpha Bank closed, 16th failure this year
By John Letzing, MarketWatch
Last update: 4:46 p.m. EDT Oct. 24, 2008

SAN FRANCISCO (MarketWatch) -- Regulators said late Friday they've closed Alpharetta, Ga.-based Alpha Bank & Trust -- the 16th U.S. bank this year to succumb to the ongoing credit crisis.

The Federal Deposit Insurance Corp. said in a statement that as of the end of September, Alpha Bank had total assets of $354.1 million, and total deposits of $346.2 million. The FDIC said there are roughly $3.1 million in uninsured Alpha Bank deposits in 59 accounts that potentially exceed its deposit insurance limits.

The FDIC recently raised its insurance limit per regular account to $250,000 from $100,000.
The FDIC said it's reached an agreement with St. Cloud, Minn.-based Stearns Bank, National Association to assume Alpha Bank's insured deposits.

In addition, Stearns Bank will purchase roughly $38.9 million of Alpha Bank's assets, while the FDIC will retain the remaining assets "for later disposition," the FDIC said.

Alpha Bank's two branches will open Monday as Stearns Bank, and Alpha Bank customers will be able to access their accounts over the weekend using ATM or debit cards or by writing checks, the FDIC said.