US regulators seize two more banks, engineer sale

[Pale Blue Dot]

Source: Reuters

WASHINGTON, July 25 (Reuters) - U.S. regulators took over two banks on Friday and sold them to Mutual of Omaha Bank, the sixth and seventh bank failures this year as financial institutions struggle with a housing bust and credit crunch.

Two weeks after the Federal Deposit Insurance Corp seized IndyMac Bancorp Inc (IDMC.PK: Quote, Profile, Research, Stock Buzz), the Office of the Comptroller of the Currency said it closed First National Bank of Nevada and First Heritage Bank NA of California.

First National had total assets of $3.4 billion and $3 billion in deposits while First Heritage had assets of $254 million and $233 million in deposits, regulators said.

The FDIC said the cost of the transactions to its insurance reserve is estimated to be $862 million, adding that the two failed banks represent just 0.3 percent of the $13.4 trillion in total industry assets at about 8,500 FDIC-insured institutions.

The FDIC said the 28 offices of the two banks will reopen on Monday as Mutual of Omaha Bank. Over the weekend, customers can access their money by writing checks, using automatic teller machines or debit cards.

Read more: http://www.reuters.com/article/bondsNews/idUSN2540487120080726

---

This happened, like Indymac, during the Friday news dump after the markets had closed.

[UpInArms]

1. just another 898 to go

won't this be just a fun ordeal?

waiting to find out which banks fail each Friday?

:sarcasm:

[skoalyman]

2. we should start a pool every Thursday to bet

how many will fail on friday :shrug:

[truthisfreedom]

3. According to my estimates, that represents 1% of the total reserves on hand at FDIC.

Only 1.25% of all deposits are required to be in the reserves, and at the moment, about 1.14% are on hand, somewhere around 80B as I recall.

[Newsjock]

4. U.S. regulators take over 1st National Bank of Nevada

Source: Associated Press

CARSON CITY, Nev. — Twenty-eight branches of 1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California, were closed Friday by federal regulators.

The banks, owned by Scottsdale, Ariz.-based First National Bank Holding Co., were scheduled to reopen on Monday as Mutual of Omaha Bank branches, the Federal Deposit Insurance Corp. said.

The FDIC said the takeover of the failed banks was the least costly resolution and all depositors – including those with funds in excess of FDIC insurance limits – will switch to Mutual of Omaha with “the full amount of their deposits.”

... As of June 30, the closed banks had total assets of $3.6-billion (U.S.). That's down from $4.1-billion six months earlier. Most of the assets are in 1st National while First Heritage accounts for $254-million.

Read more: http://www.reportonbusiness.com/servlet/story/RTGAM.20080725.wbank-takeover0725/BNStory/Business/home

[bluesbassman]

5. Drip..Drip..Drip..

Is it too late to start building an Arc?

[Indenturedebtor]

6. Afraid so. But you could always liquidate and live in a shack on teh beach somewhere n/t

[Newsjock]

7. Isn't it just a bit creepy

... how little coverage this bank failure has received?

[skoalyman]

8. yep they conveniently waited till friday after the market closed

:shrug:

[Juneboarder]

21. Is there a method to their madness?

I've noticed that this seems to happen late on friday afternoons when folks least expect this to happen... any special reasons?

[Igel]

26. It's also possible it's to help people.

In some cases they shut the bank on Friday, and have everything squared away by Monday a.m. so that depositors get their money.

[Juneboarder]

28. Imagine if it was you though...

would you be okay if the feds took over your bank on a friday afternoon? Let's say you had a nice weekend planned and was planning to run by the ATM on your way out of town to find that everything has been suspended. Truly that cannot be good for the public. That and the big worry about whether your funds that they give you will be accepted anywhere else...

[Zynx]

10. Actually keeping news of bank failures under wraps is a good idea.

In any given time any bank, regardless of its capital standing, could fail if everyone rushes for the teller window at the same time.

[AllyCat]

9. Okay, so the taxpayers bail these crooks out...we own the banks, right?

Right???

[Demeter]

22. They Were Sold Off to Mutual of Omaha per Article

So we don't own them. Don't know if FDIC had to make any payouts, either.

[harry123]

11. 2 more banks went bust on Friday

Source: LA Times via Credit Writedowns

Bad loans to developers and home builders in Arizona and Nevada led to the failure Friday of an Arizona company's two banks, including First Heritage Bank in Newport Beach.

The Federal Deposit Insurance Corp. seized the banks late in the day and turned over operations to Mutual of Omaha Bank, part of the large Mutual of Omaha insurance company.

All depositors, including those with deposits in excess of the FDIC's insurance limits, will have their accounts switched to Mutual of Omaha Bank and will be covered for all their funds, the federal agency said.

"Customers should just think of it as two banks merging," said FDIC spokesman David Barr.

Read more: http://www.creditwritedowns.com/2008/07/fdic-steps-in-at-two-more-failed-banks.html

---

Every time it's Friday night! This sort of thing is going to make people a bit more panicked about where they put their money. At least the FDIC has a ready made solution here.

The last three bank failures demonstrate that hot regions like Arizona, Nevada and California should expect to see a lot of failed banks associated with construction loans.

I've added them to my list of Bankrupt Global Financial Institutions.
http://www.creditwritedowns.com/2008/07/bankrupt-global-financial-institutions.html

I also link to two other reports on the closings.

[DemReadingDU]

16. I'm concerned about Ohio

National City Bank, Keybank, Fifth Third, Huntington, U.S. Bank.

Major banks we hear about, it's the small banks, like the 2 that just failed, that seem to fail out of nowhere.

Thanks for you lists!

Edit to add

7/14/08 Is Your Ohio Bank Financially Safe?
http://www.thestreet.com/story/10426207/1/is-your-ohio-bank-financially-safe.html

chart




It will be interesting to see if these ratings remain the same for 6/30/08.

[Demeter]

23. I'm Sure if the FDIC Could Find a Bank in the Area to Buy Them Out

they would be long gone by now. That means their troubles are unmanageable.

[DemReadingDU]

24. National City Bank has been looking for a buyer/merger for months

Several months ago, both Keybank and then Fifth Third were rumored to takeover National City. Both backed off.

Last month, our paper had an article that National City was on probation. National City's stock is only about $5, about the same as Washington Mutual $4. Today, National City is advertising 5-year CD paying 6% interest! They are desperate for money.

[Pab Sungenis]

12. They aren't the last.

I went into a big bank (I'll spare you their name) that I had an account at last week to close the account. The woman was nervous, and said they'd had a lot of that. The company was implementing new hurdles and fees to stop the outflow of money, and more than 75% of what I had left in the account was eaten up by such fees. I was just happy to get anything out of them.

Then I got a call from my financial advisor on Wednesday to make sure I closed out that account, because they had just announced they lost $9B in the last quarter due to bad mortgages.

The big banks are living in fear of a run.

[girl gone mad]

15. I made a deposit this week.

There were twice as many employees as usual, and the man who helped me was acting nervous. It was a strange experience, to say the least.

[ozymandius]

13. All is proceeding quietly.

And as our idiot overlords have said - the banking system is fundamentally sound. I guess we'll keep hearing that song for quite a few more months with hundreds of banks on the 'death watch' list.

[DemReadingDU]

14. lots more, 900 troubled banks?

7/24/08 Why wasn't IndyMac on FDIC problem list?

<snippet>

Christopher Whalen, managing director of Institutional Risk Analytics, says "everyone expects regulators to be ahead of the curve, but they never are. It's hard for regulators to be proactive. If the FDIC was beating the hell out of IndyMac a year ago, the congressmen that represent IndyMac would have been all over them."

Whalen says the problem list understates the number of troubled banks. Of about 9,000 institutions, "we have identified about 10 percent that are in significant distress and another 10 to 15 percent headed in that direction," he says.

Whalen says the problem list should be closer to 900 companies instead of 90.


more about Why wasn't IndyMac on FDIC problem list? ...
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/23/BU9A11TUKC.DTL

[ozymandius]

20. It makes sense to me that FDIC wants to keep things quiet.

I read an article written by a reporter who had a front seat ride with an FDIC agent when they stormed one of the banks on the list this year. Agents set up lodging and logistical resources away from where they stage the raid. And it is a raid. Without any niceties at all, dozens of agents storm a bank with empty file boxes (not to remain empty for long), cease all operations (including teller window activity) and shut down all other transactions. The reporter reckoned it to putting a bank in a deep freeze. Then many more agents enter the bank and begin pouring over records.

But this is how they operate: stealth and lightning-fast strike.

As this sfgate article says, "(The FDIC) does not name which institutions make the list because if it did, depositors would yank out their money and they would almost surely fail." So extreme caution is always observed from every angle. Banks are political tools just as they are financial ones. It makes sense that any regulatory body would go out of its way to avoid the barking rebuke of a Congressman. That would just make the regulator's mission evermore difficult.

The FDIC failed bank list is just that. No clue is given about future operations.

[ozymandius]

17. Here's a list of failed banks this year and the date of failure.

First Heritage Bank, NA, Newport Beach, CA July 25, 2008

First National Bank of Nevada, Reno, NV July 25, 2008

IndyMac Bank, Pasadena, CA July 11,

First Integrity Bank, NA, Staples, MN May 30, 2008

ANB Financial, NA, Bentonville, AR May 9, 2008

Hume Bank, Hume, MO March 7, 2008

Douglass National Bank, Kansas City, MO January 25, 2008

[DemReadingDU]

18. FDIC links

FDIC Failed Bank List
http://www.fdic.gov/bank/individual/failed/banklist.html


If you have an account at a recent failed bank, check this link,
There is a drop-down box for a list of the most recent failed banks for people to inquire about their accounts.
http://www4.fdic.gov/dip/index.asp

[skoalyman]

27. seams like a quiet bank crash going on ,there just trying to

keep things quiet as not to cause a run.:shrug: Still have no sympathy for key bank they'll reap the whirlwind:evilgrin: Hosea 8:1-14 - "For They Sow the Wind, and Reap the Whirlwind"

[high density]

19. It always happens after business on Friday.

That's how the FDIC does it.

The FDIC said the takeover of the failed banks was the least costly resolution and all depositors — including those with funds in excess of FDIC insurance limits — will switch to Mutual of Omaha with “the full amount of their deposits.”

http://www.msnbc.msn.com/id/25857049/

[HCE SuiGeneris]

25. Now watch this trick...

Lots more to come... x(