Smurf-Herder
08-15-2009, 07:04 PM
I wasn't sure if TARP was a good idea from the start. But now that $700 Billion is out there (with still no accounting of where the money's going), why are we still seeing an increasing number of bank failures? Apparently TARP should be called TARD.
Colonial BancGroup and Pennsylvania thrift shut
WASHINGTON (AP) - Regulators on Friday shut down Colonial BancGroup Inc., a big lender in real estate development that marked the biggest U.S. bank failure this year, and a small bank in Pennsylvania.
The closures boosted to 74 the number of federally insured banks that have failed in 2009.
The Federal Deposit Insurance Corp. was appointed receiver of Montgomery, Ala.-based Colonial, with about $25 billion in assets, and Dwelling House Savings and Loan Association, located in Pittsburgh. The agency approved the sale of Colonial's $20 billion in deposits and about $22 billion of its assets to BB&T Corp., which is based in Winston-Salem, N.C. The failed bank's 346 branches in Alabama, Florida, Georgia, Nevada and Texas will reopen at the normal times starting on Saturday as offices of BB&T, the FDIC said.
Dwelling House had $13.4 million in assets and $13.8 million in deposits as of March 31. PNC Bank, part of Pittsburgh-based PNC Financial Services Group Inc., has agreed to assume all of Dwelling House's deposits and about $3 million of its assets; the FDIC will retain the rest for eventual sale.
Dwelling House's lone office in Pittsburgh will reopen Monday as a branch of PNC Bank, the FDIC said.
The FDIC estimates that the cost to the deposit insurance fund from the failure of Dwelling House will be $6.8 million. The failure of Colonial is expected to cost the deposit insurance fund an estimated $2.8 billion.
The 74 bank failures nationwide this year compare with 25 last year and three in 2007.
As the economy has soured - with unemployment rising, home prices tumbling and loan defaults soaring - bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level since 1993, $13 billion as of the first quarter.
While losses on home mortgages may be leveling off, delinquencies on commercial real estate loans remain a hot spot of potential trouble, FDIC officials say. If the recession deepens, defaults on the high-risk loans could spike. Many regional banks hold large numbers of them.
The number of banks on the FDIC's list of problem institutions leaped to 305 in the first quarter - the highest number since 1994 during the savings and loan crisis - from 252 in the fourth quarter. The FDIC expects U.S. bank failures to cost the insurance fund around $70 billion through 2013.
The May closing of struggling Florida thrift BankUnited FSB is expected to cost the insurance fund $4.9 billion, the second-largest hit since the financial crisis began. The costliest was the July 2008 seizure of big California lender IndyMac Bank, on which the insurance fund is estimated to have lost $10.7 billion.
The largest U.S. bank failure ever also came last year: Seattle-based thrift Washington Mutual Inc. fell in September, with about $307 billion in assets. It was acquired by JPMorgan Chase & Co. for $1.9 billion in a deal brokered by the FDIC.
http://apnews.myway.com/article/20090815/D9A30GHG0.html
Colonial BancGroup and Pennsylvania thrift shut
WASHINGTON (AP) - Regulators on Friday shut down Colonial BancGroup Inc., a big lender in real estate development that marked the biggest U.S. bank failure this year, and a small bank in Pennsylvania.
The closures boosted to 74 the number of federally insured banks that have failed in 2009.
The Federal Deposit Insurance Corp. was appointed receiver of Montgomery, Ala.-based Colonial, with about $25 billion in assets, and Dwelling House Savings and Loan Association, located in Pittsburgh. The agency approved the sale of Colonial's $20 billion in deposits and about $22 billion of its assets to BB&T Corp., which is based in Winston-Salem, N.C. The failed bank's 346 branches in Alabama, Florida, Georgia, Nevada and Texas will reopen at the normal times starting on Saturday as offices of BB&T, the FDIC said.
Dwelling House had $13.4 million in assets and $13.8 million in deposits as of March 31. PNC Bank, part of Pittsburgh-based PNC Financial Services Group Inc., has agreed to assume all of Dwelling House's deposits and about $3 million of its assets; the FDIC will retain the rest for eventual sale.
Dwelling House's lone office in Pittsburgh will reopen Monday as a branch of PNC Bank, the FDIC said.
The FDIC estimates that the cost to the deposit insurance fund from the failure of Dwelling House will be $6.8 million. The failure of Colonial is expected to cost the deposit insurance fund an estimated $2.8 billion.
The 74 bank failures nationwide this year compare with 25 last year and three in 2007.
As the economy has soured - with unemployment rising, home prices tumbling and loan defaults soaring - bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level since 1993, $13 billion as of the first quarter.
While losses on home mortgages may be leveling off, delinquencies on commercial real estate loans remain a hot spot of potential trouble, FDIC officials say. If the recession deepens, defaults on the high-risk loans could spike. Many regional banks hold large numbers of them.
The number of banks on the FDIC's list of problem institutions leaped to 305 in the first quarter - the highest number since 1994 during the savings and loan crisis - from 252 in the fourth quarter. The FDIC expects U.S. bank failures to cost the insurance fund around $70 billion through 2013.
The May closing of struggling Florida thrift BankUnited FSB is expected to cost the insurance fund $4.9 billion, the second-largest hit since the financial crisis began. The costliest was the July 2008 seizure of big California lender IndyMac Bank, on which the insurance fund is estimated to have lost $10.7 billion.
The largest U.S. bank failure ever also came last year: Seattle-based thrift Washington Mutual Inc. fell in September, with about $307 billion in assets. It was acquired by JPMorgan Chase & Co. for $1.9 billion in a deal brokered by the FDIC.
http://apnews.myway.com/article/20090815/D9A30GHG0.html