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.

more...

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

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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Buy Gold & Silver

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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Buy Gold & Silver

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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Buy Gold & Silver

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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Buy Gold & Silver

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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Buy Gold & Silver

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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Buy Gold & Silver

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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Buy Gold & Silver

Freddie Mac says it is worth less than zero

The government solution will be to print more dollars...

Freddie Mac says it is worth less than zero
Suzy Jagger in New York
Times Online

Freddie Mac, the US mortgage giant, yesterday admitted that it is so overwhelmed by its liabilities that without government backing, it would no longer be a viable business. The company said that it had lost $13.7 billion (£9.2 billion) in the third quarter of the year and begged for $13.8 billion from the US Treasury in rescue funds.

The plea for the multibillion-dollar cash injection came just days after Fannie Mae reported a record $29 billion loss for the period and gave warning that it was haemorrhaging cash so rapidly, it might need federal funds by the end of the year to survive.

The US Treasury has been overwhelmed by requests for federal aid in the past few weeks. In addition to setting up a $700 billion bailout fund to take equity stakes in troubled banks, the Treasury is being pressed by the car industry for a cash bailout. Yesterday, Neel Kashkari, the Assistant Treasury Secretary, said that he was under pressure to consider ways of using the $700 billion bailout to stem a surge in foreclosures across the US.

The Freddie Mac request for funds would see the drawing down of part of the $100 billion in emergency reserves that were committed by the Treasury in September.

Freddie Mac’s problems during the third quarter fell into two categories – the continuing real-estate slump, which has been accompanied by a sharp increase in mortgage borrowers defaulting on repayments, and a tax-related charge. The company had to admit that it cannot use tax credits listed on its balance sheet as assets, because it has not generated enough taxable income.

Freddie Mac and Fannie Mae were taken under federal control in September. Between them, the two mortgage companies guarantee about half of all home loans in America. Washington took the two groups under state control after they gave warning that the rise in the number of mortgage defaults could wipe out their capital. Under the bailout’s terms, the Treasury has a right to seize 79.9 per cent stakes in both for a nominal sum. Yesterday, Freddie’s shares fell 6 cents to 67c and Fannie’s shares fell 8c to 54c. Since the US Government took control, the two groups’ shares have fallen more than 90 per cent.

In a fresh sign that the Bush Administration’s final weeks are being dictated by the incoming Obama team, the Federal Deposit Insurance Corporation (FDIC) proposed yesterday to use $24 billion in government funding to help 1.5 million American households to avoid foreclosure. The source of the money, however, is in dispute. FDIC officials want to use part of the $700 billion banking bailout, but the Treasury is opposed to the idea.

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Buy Gold & Silver

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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Buy Gold & Silver

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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Buy Gold & Silver

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.

FDIC Friday - two more banks fail

Two banks fold, bringing total to 15 failures this year
By John Letzing, MarketWatch
Last update: 6:50 p.m. EDT Oct. 10, 2008


SAN FRANCISCO (MarketWatch) -- Northville, Mich.-based Main Street Bank and Eldred, Ill.-based Meridian Bank became the latest victims of the ongoing financial crisis on Friday, when they folded and their deposits were transferred by the Federal Deposit Insurance Corp.

The closures are the 14th and 15th bank failures so far this year.

The FDIC said in a prepared statement that Main Street Bank had $98 million in total assets and $86 million in total deposits as of Tuesday. All of Main Street's deposits were assumed by Monroe, Mich.-based Monroe Bank & Trust, the FDIC said.

The FDIC said that Meridian Bank had total assets of $39.2 million and $36.9 million in total deposits as of Sep. 25. National Bank will buy roughly $7.6 million of Meridian's assets, while the FDIC will "retain the remaining assets for later disposition," according to its statement. All of Meridian Bank's depositors, "including any with deposits in excess of the FDIC's insurance limits," will automatically become depositors of Hillsboro, Ill.-based National Bank, the FDIC said.

The FDIC said Main Street Bank's failure will cost its insurance fund between $33 million and $39 million, while Meridian's failure will cost the fund between $13 million and $14.5 million.
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Buy Gold & Silver

FDIC Insurance: The Big Lie

The new bailout package has lifted the FDIC insurance amount from $100,000 per account to $250,000 per account. Do not be misled by this Confidence Game.

Let's look at the facts:

The FDIC, according the its 2007 annual report, has $53 billion dollars.
The Indy Mac Bank Failure is expected to soak up from $4 billion to $8 billion.
That leaves any where from $45 billion to $49 billion dollars to guarantee over 4 Trillion dollars worth of deposits.

Banks only keep about $1 on hand to cover every $10 worth of deposits. The rest of the money has been loaned out. This means that if more than 10 percent of the depositors attempt to withdraw their funds at any one time the banks would have to shut down because the funds would not be there. How do you like those odds of getting your money out? It's like playing a game of musical chairs with one chair and nine other people. Everything is fine while the music is playing but what happens when the music stops?

Here is what would likely happen if more than 10% of the depositors attempt to withdraw their cash at the same time:

First, the government would declare a "bank holiday" and close down the banks for a period of days. When they reopen they would likely limit the amount of money that you can pull out each week. A few short years ago this happened in Argentina where depositors could only withdraw $200 per week.

Next, they would pump liquidity into the markets (in other words they would print massive amounts of money) sparking accelerated inflation. This would cause people to dump their dollars and trade them for basic goods and gold in order to protect their purchasing power.

This rapid increase in the money supply becomes self-feeding as people dump more and more dollars for items that act as a "store of value" causing supply shortages. Prices of food and other necessities would rise rapidly. Precious Metals will also rise rapidly.

Don't wait for these things to happen before acting. Pull out the money you want to protect, build up your food storage, and buy as much gold, silver, and platinum that you can.

Sincerely,
The Bullion Insider
Trust in Gold

Breaking News: Looks like the WaMu "milk" has officially expired!

J.P. Morgan to Take Over Faltering WaMu

U.S. Government Helps Broker a Deal to Dispose of Huge Thrift; Banking Giant Expected to Get Deposits, Branches

By ROBIN SIDEL, DAVID ENRICH and DAMIAN PALETTA

Source: Wall Street Journal

J.P. Morgan Chase & Co. was expected to announce as early as Thursday night a deal to acquire the bulk of Washington Mutual Inc.'s operations in a deal that would mark the end of independence for what once was the largest U.S. thrift.

Associated Press

Pedestrians walk past a Washington Mutual branch in downtown Seattle.

Federal regulators have been heavily involved in orchestrating the transaction, which comes as WaMu was besieged by a mountain of bad mortgage loans. Seattle-based WaMu has been scrambling to find a solution and put itself on the auction block last week. A number of interested parties have been poring over WaMu's books, but the bank didn't receive any offers.

While the exact structure of the transaction wasn't immediately known, J.P. Morgan is expected to acquire Washington Mutual's deposits and branches, as well as other operations. The deal isn't expected to result in any hit to the bank-insurance fund, according to a person familiar with the arrangement. But it's likely that another arm of government would have to pick up the tab. Some analysts have worried that a WaMu failure could cost more than $20 billion.

Federal regulators have been heavily involved in orchestrating the transaction, which comes as WaMu grapples with its bad mortgage loans. Regulators were hoping to fend off a collapse of WaMu, which, with more than $300 billion in assets, would mark by far the largest banking failure in U.S. history.

The exact structure of J.P. Morgan's acquisition of WaMu's deposits wasn't immediately known, except that the New York bank, which has long coveted WaMu as a way to secure a footprint on the West Coast, will assume most of the thrift's deposits and branches, as well as some other operations.

Unlike many of the 12 bank failures that the Federal Deposit Insurance Corp. has overseen this year, the J.P. Morgan-WaMu transaction isn't expected to impact the agency's national deposit-insurance fund. It wasn't immediately clear how the transaction would be structured to avoid the insurance fund taking a hit.

With mortgage losses mounting, and its stock price plunging, WaMu has been scrambling over the past month to find a solution; last week it put itself on the auction block. A number of banks -- including Citigroup Inc., Wells Fargo & Co. and Banco Santander SA -- pored over WaMu's books, but the bank didn't receive any offers. This week, WaMu's outside bankers approached a group of private-equity funds to gauge their interest in a deal.

Also this week, the FDIC took the step of reaching out to banks, asking them to express interest in taking over some or all of WaMu, according to people familiar with the matter. Those bids were due at 6 p.m. Wednesday. J.P. Morgan's takeover of WaMu's deposits represents a huge blow for private-equity firm TPG, which injected $7 billion into the thrift this spring. The transaction is expected to wipe out WaMu stockholders and holders of the company's senior debt, one person said. A key unknown: the fate of WaMu's bad assets, which include mortgage loans that have soured as housing markets tanked.

Arranging the deal in a way that doesn't cost the FDIC's deposit insurance fund any money would be an achievement for Chairman Sheila Bair, who has had a hawkish view about the state of many financial institutions. Federal regulators faced criticism from many after the July failure of IndyMac Bank, which the FDIC estimated might have cost the deposit insurance fund close to $9 billion.

This is the second time the government has gone to J.P. Morgan as a buyer of last resort. In March, the government agreed to backstop J.P. Morgan's takeover of Bear Stearns. This will likely prompt criticism from rivals about preferential treatment. BofA, for instance, didn't receive government assistance in its recently announced purchase of Merrill Lynch. Of course, in the case of WaMu, there were presumably other bidders who simply wouldn't offer that much for the deposits and branches. Before the deal, J.P. Morgan ranked as the fourth-largest bank as measured by branches, ranking below Bank of America Corp., Wachovia Corp. and Wells Fargo & Co. Its network of more than 3,100 branches stretches across 17 states with deep penetration in New York, Illinois, Texas, Michigan and Ohio.

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Buy Precious Metals

Washington Mutual passed expiration date?

WaMu is past its expiration date
Commentary: Seattle-based thrift is headed for a steep discount
By MarketWatch
Last update: 11:44 a.m. EDT Sept. 25, 2008

NEW YORK (MarketWatch) -- Washington Mutual Inc. is kind of like that milk in the refrigerator that's a couple of days past its expiration date.
It may be fine or have gone past the point of no return. Either way, it's not long before it will be gone.

Only the bankers who have been able to dig through WaMu's (WM Washington Mutual Inc portfolio can say with much certainty how long WaMu will last and judging by their reaction, they don't like what they smell.

J.P. Morgan Chase & Co., Toronto-Dominion and Citigroup Inc. all have reportedly passed on the auction of the bank. They dropped out after conducting an inspection of WaMu's mortgage portfolio -- assets that Standard & Poor's seemed convinced Wednesday could not be sold to raise capital.

Now, under pressure from the Office of Thrift Supervision, WaMu is looking for a private equity investor and has opened talks with the Carlyle Group and Blackstone Group LP about a capital infusion.

Should that fail, WaMu issued a statement Wednesday reminding its customers that their $143 billion in deposits are insured up to $100,000. WaMu is also getting desperate, offering 4% interest -- more than twice the national average -- on deposits made online.

If any deal occurs, expect buyers to take on a small part of WaMu - its branches, mortgage offices and deposits -- the rest of the bank is going bad and investors run the risk of getting sick.

- David Weidner
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