Regulators on Friday shut down banks in Florida, Minnesota, Arizona and California, bringing the number of U.S. bank failures to 68 this year.
The Federal Deposit Insurance Corp. took over The Bank of Bonifay, based in Bonifay, Fla., which had $242.9 million in assets and $230.2 million in deposits; and Access Bank, in Champlin, Minn., with $32 million in assets and $32 million in deposits.
The agency also seized Towne Bank of Arizona in Mesa, Ariz., with $120.2 million in assets and $113.2 million in deposits; and 1st Pacific Bank of California in San Diego, with $335.8 million in assets and $291.2 million in deposits.
First Federal Bank of Florida in Lake City, Fla. agreed to acquire Bonifay's deposits and about $78.1 million of its assets. The FDIC will keep the remainder for eventual sale.
PrinsBank of Prinsburg, Minn. will assume Access' deposits and assets.
Commerce Bank of Arizona, based in Tucson, Ariz., agreed to assume all of the deposits and assets of Towne Bank, and City National Bank of Los Angeles will assume all of 1st Pacific Bank's deposits and assets.
The failure of The Bank of Bonifay is expected to cost the deposit insurance fund $78.7 million; that of Access Bank, $5.5 million; that of Towne Bank, $41.8 million; and that of 1st Pacific Bank, $87.7 million.
With the 68 closures so far this year, the pace of bank failures this year is double that of 2009. By May 1 last year, U.S. regulators had shut down 32 banks.
There were 140 bank failures in the U.S. last year, the highest annual tally since 1992, at the height of the savings and loan crisis. They cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008 and only three succumbed in 2007.
The number of bank failures likely will peak this year and will be slightly higher than in 2009, FDIC Chairman Sheila Bair said recently.
As losses have mounted on loans made for commercial property and development, the growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, hitting a $20.9 billion deficit as of Dec. 31.
The number of banks on the FDIC's confidential "problem" list jumped to 702 in the fourth quarter from 552 three months earlier, even as the industry squeezed out a small profit. Still, nearly one in every three banks reported a net loss for the latest quarter.
The FDIC expects the cost of resolving failed banks to grow to about $100 billion over the next four years.
The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.
Depositors' money -- insured up to $250,000 per account -- is not at risk, with the FDIC backed by the government. Apart from the fund, the FDIC has about $66 billion in cash and securities available in reserve to cover losses at failed banks.
Friday, May 7, 2010
Market Drama
When the dust finally settles, Thursday May 6th will be seen as a day of booms and busts. If you were short, and were able to get out when we tanked hard, you made a tidy sum of money, and if you were long, you either got smacked or you rode out the yo-yo and pared the losses. More than likely, you fell somewhere in between.
I got the phone calls up till midnight last night about what happened. I actually left my computer about 20 minutes before the big sell off to do some volunteering, so I was not here to see what happened but never the less I heard a ton of stories. So, here is a brief list of what I have heard up till lunch time today. I have no confirmation as to these stories being real or just rumors. Some sound easily believable, others, not. Make your own judgement.
Remember, these are all RUMORS and many of them conflict:
The Euro will be gone by July 4th
The Euro will be gone by next week
The Euro will be gone by the end of the year
The Euro will survive this and not go anywhere
Greece is a drop in the bucket, there is much more to come
This will end with Greece. After they figure out how to fix them, they will use that formula on other countries in trouble
The USA is next to fall
The USA will never go through that
An "off the floor" futures trader at the CBOT made $4,000,000 and change during that black hole move
Hedge funds blew up "left and right"
An equities trader lost 78% of his portfolio, capitulating 30 seconds before the lows
A big commodity fund is on the ropes and ready to shut down
It will be hard for the retail investor to ever trust the market again
This was the buying opportunity of the year
We crashed
It's Goldman's fault!
Al I know is it appears that volatility is back for now, but remember, it's a double edged sword. Make sure your trading plan is tuned up and you follow your risk management matrix or else the market will make short work of you, no pun intended.
I got the phone calls up till midnight last night about what happened. I actually left my computer about 20 minutes before the big sell off to do some volunteering, so I was not here to see what happened but never the less I heard a ton of stories. So, here is a brief list of what I have heard up till lunch time today. I have no confirmation as to these stories being real or just rumors. Some sound easily believable, others, not. Make your own judgement.
Remember, these are all RUMORS and many of them conflict:
The Euro will be gone by July 4th
The Euro will be gone by next week
The Euro will be gone by the end of the year
The Euro will survive this and not go anywhere
Greece is a drop in the bucket, there is much more to come
This will end with Greece. After they figure out how to fix them, they will use that formula on other countries in trouble
The USA is next to fall
The USA will never go through that
An "off the floor" futures trader at the CBOT made $4,000,000 and change during that black hole move
Hedge funds blew up "left and right"
An equities trader lost 78% of his portfolio, capitulating 30 seconds before the lows
A big commodity fund is on the ropes and ready to shut down
It will be hard for the retail investor to ever trust the market again
This was the buying opportunity of the year
We crashed
It's Goldman's fault!
Al I know is it appears that volatility is back for now, but remember, it's a double edged sword. Make sure your trading plan is tuned up and you follow your risk management matrix or else the market will make short work of you, no pun intended.
Jim Rogers views
The suspected erroneous trades that exacerbated the Wall Street's fall on Thursday should be investigated and solutions must be found if the New York Stock Exchange is to maintain its reputation, investor Jim Rogers told CNBC late Thursday.
The Dow ended Thursday's session down 3.2 percent, at 10,520.32, after being down as much as 998.50 points earlier, the index's biggest intraday drop on record.
According to regulatory officials, "a huge, anomalous, unexplained surge in selling" happened at about 2:45 p.m. New York time, setting off trading based on computer algorithms, thus amplifying the fall.
"Somebody should hang this New York Stock Exchange," Rogers said. "They claim to be the center of the world's capitalism, of the world's financial markets, you would think that in 2010 they could sort out simple things like electronics."
The New York Stock Exchange is investigating the cause of the possible erroneous trades.
But any tech problems alone are not to blame for the whole of the collapse as a decline was overdue, he added.
"It's time for a consolidation, there's always a reason for consolidation when it comes, the market went up for 13 months in a row, now we're going to, you know, correct for a while," Rogers told CNBC. "In my view the correction should have started sooner."
Rogers said he was long the dollar and the yen but "unfortunately" he was also long the euro, which economists predicted will collapse.
"You never have enough shorts when things collapse," he said. "I think people should be looking for shorts or defensive positions because we're going to have problems for a while, at least in my view."
Giving money to Greece will not solve its problems, it will only postpone them, as liquidity injections in other parts of the world have done, Rogers warned.
"As I've been saying to you all before, 2010 and 2011 are going to be years of currency turmoil not just in Europe but all over the world and Greece is bankrupt," he said.
"We can paper it over for a while, just as we papered over some of the problems in the US and the UK but the problems are going to come back," said Rogers.
Correction: A previous version of this story said a "glitch" at the New York Stock Exchange caused an accelerated selloff. This version makes clear the cause for the sudden surge in selling is unknown, but that erroneous trades are suspected.
The Dow ended Thursday's session down 3.2 percent, at 10,520.32, after being down as much as 998.50 points earlier, the index's biggest intraday drop on record.
According to regulatory officials, "a huge, anomalous, unexplained surge in selling" happened at about 2:45 p.m. New York time, setting off trading based on computer algorithms, thus amplifying the fall.
"Somebody should hang this New York Stock Exchange," Rogers said. "They claim to be the center of the world's capitalism, of the world's financial markets, you would think that in 2010 they could sort out simple things like electronics."
The New York Stock Exchange is investigating the cause of the possible erroneous trades.
But any tech problems alone are not to blame for the whole of the collapse as a decline was overdue, he added.
"It's time for a consolidation, there's always a reason for consolidation when it comes, the market went up for 13 months in a row, now we're going to, you know, correct for a while," Rogers told CNBC. "In my view the correction should have started sooner."
Rogers said he was long the dollar and the yen but "unfortunately" he was also long the euro, which economists predicted will collapse.
"You never have enough shorts when things collapse," he said. "I think people should be looking for shorts or defensive positions because we're going to have problems for a while, at least in my view."
Giving money to Greece will not solve its problems, it will only postpone them, as liquidity injections in other parts of the world have done, Rogers warned.
"As I've been saying to you all before, 2010 and 2011 are going to be years of currency turmoil not just in Europe but all over the world and Greece is bankrupt," he said.
"We can paper it over for a while, just as we papered over some of the problems in the US and the UK but the problems are going to come back," said Rogers.
Correction: A previous version of this story said a "glitch" at the New York Stock Exchange caused an accelerated selloff. This version makes clear the cause for the sudden surge in selling is unknown, but that erroneous trades are suspected.
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