The VIX is up 14%. Volatility returns with great force!
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11AugFinancial transaction, breaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, daily stock picks, daily stock tips, daytrades, deals, debt, fed action, financial settlement, free stock info, free stock picks, free stock tips, market facts, markets, trading, trend, usa economics No Comments
Tags: The VIX is up 14%
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23Julbreaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, debt, fed action, global economy, government, liquidity, money, trend, usa economics No Comments
White House Predicts Record Deficit
New White House estimates predict an unemployment rate of 9 percent and a budget deficit of $1.42 trillion next year — even bigger than previously expected.Officials Say Gov’t Now Borrowing 41 Cents Of Every Dollar Spent
New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.
That’s actually a little better than the administration predicted in February.
The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, presently averaging 9.5 percent, would average 9 percent next year under the new estimates.
The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012 - a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don’t think the unemployment rate will drop to those levels until well into this decade.
“The U.S. economy still faces strong headwinds,” the OMB report said. They include tight credit markets, a high inventory of unsold housing and retrenchment by state governments bound by balanced budget mandates. The European debt crisis has also had an impact.
“Despite these headwinds, the administration expects economic growth and job creation to continue for the rest of 2010 and to rise in 2011 and beyond,” the report said.
The gaping deficits are of increasing concern to voters. But Obama and Democrats controlling Congress are mostly taking a pass on deficit reduction this year as they await possible recommendations from Obama’s deficit commission.
While there’s a slight improvement in the deficit for the current year compared to the administration’s February forecast, next year’s predicted $1.42 trillion worth , next year’s predicted $1.42 trillion worth of red ink - that’s 37 cents of borrowing for every dollar spent - is looking worse. It’s about $150 billion more than previously predicted, because of still-slumping tax revenues.
The current record holder is the $1.41 trillion deficit for 2009.
Economists agree that the most important measure of the deficit is against the size of the economy. Opinions vary, but many economists say a deficit of 3 percent of gross domestic product is sustainable since it would stabilize the overall debt when measured relative to the economy.
The report put the deficit at 10 percent of GDP this year and 9.2 percent of GDP next year. It would never reach the 3 percent figure under Obama’s predictions - which underestimate war costs and depend on assumptions of tax hikes that may not materialize.
OMB Director Peter Orszag said the numbers represent a “fiscal situation that requires attention.”
Obama “has done little to confront this domestic enemy,” said Rep. Mike Pence, R-Ind. “Washington desperately needs real leadership. We cannot continue to postpone the hard choices and sacrifices that are necessary to stop this fiscal train wreck.”
Deficits have skyrocketed since the recession took hold in 2008 and Congress responded with a massive bailout of the financial system and last year’s $862 billion stimulus measure.
“What we should be doing now is putting in place deficit reduction policies that will kick in after the economy has more fully recovered,” said Senate Budget Committee Chairman Kent Conrad of North Dakota. “It is an unsustainable long-term course.”
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14JulLife settlement, breaking market news, breaking stock market news, breaking wall street news, cash, debt, fed action, global economy, government, money, usa economics No Comments
Federal budget gap tops $1 trillion through June
Federal budget gap through June tops $1 trillion amid GOP resistance to more gov’t spending
The federal deficit has topped $1 trillion with three months still to go in the budget year, showing the lasting impact of the recession on the government’s finances.
In its monthly budget report, the Treasury Department said Tuesday that through the first nine months of this budget year, the deficit totals $1 trillion. That’s down 7.6 percent from the $1.09 trillion deficit run up during the same period a year ago.
Worries about the size of the deficit have created political problems for the Obama administration. Congressional Republicans and moderate Democrats have blocked more spending on job creation and other efforts. Republicans also have held up legislation to extend unemployment benefits for the long-term jobless because of its effect on the deficit.
Another failed effort would have provided cash-starved states with money to help avoid layoff of public employees and finance the Medicaid program for the poor and disabled.
President Barack Obama also encountered resistance to further stimulus spending at a meeting of the Group of 20 major industrial nations last month in Toronto.
Obama expressed concerns about the risks to a fragile global recovery from withdrawing spending too soon. But the G-20 adopted targets to cut deficits in half as a percentage of their economies over three years.
The deficit in the federal budget in June totaled $68.4 billion, the second highest June deficit on record, but down from the all-time high of $94.3 billion in June 2009, a month when the government was spending heavily to stabilize the financial system and jump-start economic growth.
June is normally a surplus month as the government collects tax payments from corporations and individuals who make quarterly payments. Only seven years in the past 56 have seen deficits in June.
Many private economists are forecasting that the deficit for the entire budget year, which ends on Sept. 30, will come in around $1.3 trillion. That would be the second highest deficit on record, but it would be down slightly from last year’s all-time high of $1.4 trillion.
The Obama administration is forecasting that the deficit for the 2011 budget year, which begins Oct. 1, will remain above $1 trillion for a third straight year, projecting an imbalance of $1.27 trillion. And the administration predicts the imbalances over the next decade will total $8.5 trillion.
The deficits have been driven higher by the lingering effects of the worst recession since the 1930s. About one-third of the higher deficits in this period are a result of a drop in government tax revenues.
The other two-thirds of the deficit increases reflect higher government spending to stabilize the financial system with the $700 billion bailout program and the $787 billion stimulus program that Congress passed in February 2009. The increased spending also reflected added demands for such programs as unemployment benefits and food stamps.
The tide of red ink has sparked a political backlash with surveys showing rising unhappiness among voters with the ballooning deficits.
Through the first nine months of the current budget year, government revenues have totaled $1.6 trillion, up 0.5 percent from the same period a year ago.
Government spending totals $2.6 trillion, down 2.8 percent from the same nine months a year ago. That decline primarily reflects lower spending on the financial bailout effort as banks are now repaying the billions of dollars they received to bolster their capital reserves at the peak of the financial crisis.
Obama has appointed a national debt commission to report after the November midterm elections on ways that the federal deficits can be brought under control.
The heads of the panel told the National Governors Association on Sunday that everything needs to be considered including curtailing popular tax breaks, such as the home mortgage deduction.
“The debt is like a cancer,” Democrat Erskine Bowles told the governors. “It is going to destroy the country from within.”Tags: $1 Trillion Dollars, 1000000000000.00, Federal budget gap tops $1 trillion through June, Trillion Dollars
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10Julbreaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, debt, usa economics No Comments
U.S. marks 3rd largest single day debt increase
$166 billion jump spurs concerns over policy
The National Debt Clock is shown Monday, Feb. 1, 2010 in New York. President Barack Obama sent Congress a $3.83 trillion budget on Monday that would pour more money into the fight against high unemployment, boost taxes on the wealthy and freeze spending for a wide swath of government programs. The deficit for this year would surge to a record-breaking $1.56 trillion. The Debt Clock is a privately funded estimate of the national debt.
The nation’s debt leapt $166 billion in a single day last week, the third-largest increase in U.S. history, and it comes at a time when Congress is balking over higher spending and debt has become a key policy battleground.
The one-day increase for June 30 totaled $165,931,038,264.30 - bigger than the entire annual deficit for fiscal year 2007 and larger than the $140 billion in savings the new health care bill will produce over its first 10 years. The figure works out to nearly $1,500 for every U.S. household, or more than 10 times the median daily household income.
Daily debt calculations jump and fall, and big shifts are common. But all three of the biggest one-day debt increases have occurred under the tenure of President Obama, and all of the top six have been in the past two years - an indication of just how quickly the pace of deficit spending has risen under Mr. Obama and President George W. Bush.
“What matters is the overall trend line, and the overall trend line is shooting up,” said Robert Bixby, executive director of the Concord Coalition, a bipartisan deficit watchdog group, who said it is one more reason for a fiscal wake-up call.
Fears over red ink have stalled key parts of Mr. Obama’s agenda in Congress in recent weeks, including his push for another round of stimulus spending. Just last week, House Democrats had to use a tricky parliamentary tactic to pass an emergency war-spending bill, aid for teachers and new spending caps.
On Wednesday, the Congressional Budget Office said the government has recorded a $1 trillion deficit for the first nine months of fiscal 2010, which began Oct. 1. That’s slightly down from 2009’s record $1.1 trillion deficit at this point.
CBO said revenues are doing slightly better this year than last year, while spending is down about $73 billion, mainly because the government made giant payments last year to bail out Wall Street, but did not have similar expenses this year. Other spending is higher, including unemployment benefits, which have jumped nearly 50 percent.
Deficits are the difference between what the government raises in revenue versus what it spends each year, while debt is the accumulation of those deficits over many years.
The Treasury Department calculates the country’s debt position each day, and big rises and falls are not unusual. In fact, since hitting $13.203 trillion on June 30, the figure has since slipped $25 billion to settle at $13.178 trillion as of Tuesday, the latest day for which figures are available.
June 30 is always a major day for new debt, since debt held by one part of the government to another - for example, IOUs to the Social Security trust fund - are rolled over, a spokeswoman for the Bureau of the Public Debt said.
All told, this June 30, the government reported issuing $760 billion in new debts and redeeming $594 billion, for a new net debt of $166 billion that day.
White House officials said that big a jump is not the norm and that Mr. Obama has worked with the hand he was dealt by Mr. Bush. He has had to push spending to try to jump-start the economy and create jobs, even as he has also pledged to work in the long term to reduce annual deficits and bring the debt under control.
The budget he submitted to Congress earlier this year calls for a mix of tax increases and spending reductions, including a freeze on non-security discretionary spending, that would reduce deficits by $1 trillion over the next decade.
Mr. Obama has also named a bipartisan commission to recommend major changes that could help reduce the deficit to about 3 percent of gross domestic product, and stabilize the debt held by the public - a somewhat different figure than total debt - at about 60 percent of GDP, which the administration argues are more sustainable levels.
Testifying to that commission last week, CBO Director Douglas W. Elmendorf said to reach the sustainable debt goal the government will have to raise taxes by 25 percent, cut spending by 20 percent or do some combination of the two.
“That would require, for example, roughly a one-half increase in personal income tax revenue. On the other hand, if the change came entirely from spending … that would represent, for example, the near elimination of all government programs except for Social Security, Medicare, Medicaid and national defense,” he said.
The White House said CBO’s scenario doesn’t take into account some of Mr. Obama’s proposals, such as long-term cuts in spending resulting from the new health care law.
Still, Mr. Bixby, the deficit watchdog, said the size of the numbers CBO laid out to the commission shows the tough choices that await Congress. He said the solution will have to be a combination of revenue increases and changes to major programs such as Social Security and Medicare, which are growing at a faster rate than the economy as a whole.
Total public debt includes two pots of money. One is normal government debt in the form of Treasury bills and bonds held by consumers, while the other is intragovernmental holdings, or money one part of the government borrows from another agency. That includes money borrowed from the Social Security trust funds.
Some analysts say the key measure is not the total public debt, but the debt in the hands of consumers. That figure stood at $8.628 trillion on Tuesday.
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01JunFinancial transaction, banking, breaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, cash, debt, fed action, financial settlement, government, loan, market facts, money, return rate, structured settlements, usa economics No Comments
U.S. Regulators Close Five More Banks
* EverBank
* Bank of Florida
* Granite Community Bank
* City National Bank
* Sun West BankThe U.S. state and federal regulators have shut down five banks in Florida, California and Nevada, The Wall Street Journal reports. The closure has brought the nationwide total of failed institutions until May 2010 to 78.
EverBank of Jacksonville will buy the banking operations of the three units of Bank of Florida, including a combined $1.32 billion in deposits. The regulators have also seized California-based Granite Community Bank, which will be taken over by Tri Counties Bank. The Los Angeles-based City National Bank will acquire the Sun West Bank, which has $353.9 million in deposits.
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18MayLife settlement, analysis, deals, debt, fed action, financial settlement, government, housing markets, leverage, liquidity, loan, money, savings, settlement, structured settlements, usa economics No Comments
America’s Underclass: Growing Gap Between the Rich and Poor
Macro economic data suggest the great recession is over. But the gap between the haves and the have-nots is growing, thanks, in large part, to a jobless recovery. Wall Street Cheat Sheet’s Damien Hoffman says the growing underclass now accounts for about 10% of the U.S. population.In this clip, he and his brother Derek, who jointly run the Wall Street Cheat Sheet website, point to several signs America is turning into a two-class society:
-The foreclosure problem. 2.8 million homes were foreclosed in 2009. RealyTrac expects that number to increase to 3-3.5 million in 2010. Damien Hoffman thinks it could be even higher if “strategic foreclosures” become a more accepted practice.
- Unemployment. The official rate is 9.9% but the wider measure of under employed and those who have given up on their job search is more like 17%. That’s more than 24 million Americans out of work.
- Record numbers using food stamps. The Agriculture Department said a record 40 million Americans, or 1 in 8 Americans, may not be able to eat without government assistance. “This is the ultimate sign of an under class,” the Hoffman Brothers say.
- Take a look at Dollar Tree Stores. The discounter’s stock is near an all-time high while revenues are up 12.5% this year. In other words, more Americans are chasing cheaper goods.Tags: America's Underclass: Growing Gap Between the Rich and Poor, dji, dltr, gspc, kbh, TLT, xhb, xrt
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16MayFinancial transaction, Movers & Shakers, banking, breaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, debt, fed action, financial settlement, structured settlements No Comments
Bank Failures outpace 2009’s default rate
State regulators closed four community banks Friday, bringing the total number of failed banks for 2010 to 72. Year-to-date bank failures were more than double the pace for the same period in 2009, when there were 33 bank closures.Midwest Bank & Trust
The largest bank failure on Friday was Midwest Bank & Trust of Elmwood Park, Ill, which was the main subsidiary of Midwest Banc Holdings (MBHI).After state regulators took over the institution, the Federal Deposit Insurance Corporation was appointed receiver and sold Midwest to FirstMerit Bank, NA of Akron, Ohio, which is held by FirstMerit Corp (FMER).
While Midwest Bank & Trust faced mounting loan losses, the deterioration of the bank’s capital first came to a head when the government-sponsored mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) were placed under government conservatorship in September 2008. On the holding company level, Midwest Banc Holdings reported total 2008 losses and impairment charges of nearly $82 million on the company’s investments in preferred shares of Fannie and Freddie.
FirstMerit paid the FDIC a premium of 0.4% for Midwest Bank & Trust’s $2.4 billion in deposits, and the FDIC agreed to share in losses on $2.3 billion of the assets First Merit acquired. Midwest’s 23 offices were scheduled to reopen Saturday as FirstMerit branches. -
15MayFinancial transaction, banking, breaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, debt, equity, financial settlement, liquidity, money, savings, structured settlements, trend, usa economics No Comments
Bank-Failures swell to 72 for 2010
State regulators shuttered small banks in Illinois, Missouri, Georgia and Michigan, including a 23-branch community bank that failed despite having received an infusion from the government’s Troubled Asset Relief Program.So far this year, 72 banks have collapsed and the spate of failures is expected to continue throughout 2010. Although there are signs that the worst of the financial crisis may be over for the banking industry, financial institutions are still being battered by severe losses on mortgages and commercial real-estate loans.
In the largest of Friday’s closures, Illinois regulators closed Midwest Bank & Trust Co. of Elmwood Park. FirstMerit Corp., based in Akron, Ohio, agreed to take over Midwest’s 23 branches, $2.42 billion in deposits and essentially all of its $3.17 billion in assets.
Midwest had been warning for months that it was in dire financial straits. On Thursday, the bank said in a securities filing that it would likely be placed into receivership because it had been unable to raise fresh capital after a previous plan had been rejected by the Federal Reserve.
Its failure is a financial blow to the government, which had previously swapped the preferred shares that it held in Midwest for common shares. The government had received the preferred shares when it injected Midwest with $84.8 million of TARP funds. Common shareholders typically are wiped out when a bank fails.
FirstMerit, which has been a bidder on other failed banks, agreed to pay the Federal Deposit Insurance Corp. a premium of 0.4% for Midwest’s deposits. FirstMerit also entered into a loss-sharing transaction on $2.27 billion of Midwest’s assets.
As part of the deal, the FDIC will receive a so-called value appreciation instrument, which will provide the agency with additional money if FirstMerit’s share price rises over a certain amount of time.
Midwest was the 11th bank to fail in Illinois so far this year.
Elsewhere, regulators in Georgia, Illinois and Michigan closed three one-branch banks.
In Georgia, state regulators seized Satilla Community Bank, of Saint Marys, Ga. Ameris Bank, based in Moultrie, Ga., agreed to assume all of the deposits and most of its assets. Satilla had $135.7 million in assets and $134 million in deposits at March 31.
Ameris, which is paying a premium of 0.19% to assume Satilla’s deposits, also entered into a loss-sharing agreement with the FDIC. It was the eighth bank failure of the year in Georgia.
Michigan regulators closed Plymouth-based New Liberty Bank, which had roughly $109.1 million in assets and $101.8 million in deposits. Bank of Ann Arbor, based in Ann Arbor, assumed all of the deposits and agreed to buy nearly all of the assets. It didn’t pay a premium for the deposits.
In Missouri, regulators closed Southwest Community Bank, based in Springfield. Its $96.6 million in assets and $102.5 million in deposits are being assumed by Simmons First National Bank, of Pine Bluff, Ark.
The FDIC estimated the four failures would cost $301.7 million to its deposit insurance fund.
Tags: Bank-Failure Tally Grows to 72 for 2010, Bank-Failures swell to 72 for 2010
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09Maybreaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, deals, debt, equity, fed action, free stock info, free stock picks, free stock tips, global economy, market facts, markets, short term investments, trading, trading ideas, trend No Comments
E.U. Offers $957 Billion Rescue Package
European leaders, pressured by sliding markets and doubts over their ability to act in unison, agreed on Sunday to provide a huge rescue package of nearly one trillion dollars in a sweeping effort to regain lost credibility with investors.
After more than 10 hours of talks, finance ministers from the European Union agreed on a deal that would provide $560 billion in new loans and $76 billion under an existing lending program. Elena Salgado, the Spanish finance minister, who announced the deal, also said the International Monetary Fund was prepared to give up to $321 billion separately.
Officials are hoping the size of the program - a total of $957 billion - will signal a “shock and awe” commitment that will be viewed in the same vein as the $700 billion package the United States government provided to help its own ailing financial institutions in 2008.
The leaders were making yet another attempt to stem a debt crisis that has engulfed Europe and global markets. Underscoring the urgency, President Obama spoke to the German chancellor, Angela Merkel, and the French president, Nicolas Sarkozy, on Sunday about the need for decisive action to restore investor confidence.
New political complications in two of Europe’s most important countries added to the challenge. In Germany, voter anger at the effort to save Greece cost Ms. Merkel an important regional election Sunday, undermining her leadership , and in Britain, the government remained in a state of suspended animation because of the inconclusive Parliamentary elections last week.
The package comes at a time of mounting financial unease. Riots in Greece, ever-tightening terms of credit and the unexplained free fall in the American stock market last Thursday have compounded the sense that the European Union’s inability to address its sovereign debt crisis might lead to the type of systemic collapse that followed the fall of Lehman Brothers.
What appeared to be emerging from the discussions represented a partial retreat from a system discussed earlier in the day that would have radically expanded the powers of the European Commission to raise funds.
Instead, the diplomats said, the ministers were discussing an alternative — a system that would speed up the pace at which states that use the euro currency could lend to one another, but on a bilateral and voluntary basis. The diplomats spoke on condition of anonymity because the discussions were ongoing.
The diplomats said that the I.M.F. would be expected to play some role in an overall aid package. But they said the fund’s contribution probably would remain separate to the loan guarantees offered by euro-area member states and loans managed by the European Commission.
An I.M.F. contribution of 220 billion euros would bring the total of new loan guarantees to 720 billion euros, or more than $900 billion.
While the sums being discussed are eye-catching, some bankers questioned whether they would be enough to calm the markets. One banker said that with more and more European economies coping with rising deficits that raising, guaranteeing or backing such a large number would not be an easy task — unless the European Central Bank stepped in a more forceful and specific manner. The bank has so far rebuffed calls to inject liquidity into the markets by buying back European bonds.
There were many complications in trying to forge a consensus on a new package. They included defining the role of Britain, which lies outside the euro zone and had said it would not help in propping up the euro, as well as the European Central Bank. The fractiousness underscores the frailty of a monetary union in which its richest member, Germany, is also the most opposed to a financial rescue.
“The fact that they are worried is clear,” said David Marsh, the author of the Euro, a book on the history of monetary union. “But I don’t think that there is enough commitment or economic firepower in Germany to provide the massive loan guarantees to satisfy the markets.”
Predictably, politicians blamed speculators for the market upheaval. The Swedish finance minister, Anders Borg, said immediate action was needed to tackle “herd behaviors in the markets that are really pack behaviors, wolf pack behaviors.” Mr. Borg warned that volatility in markets could “tear the weaker countries apart.”
Since it became clear that Greece would not be able to meet its financial obligations and fears spread that other indebted nations like Spain, Portugal and Ireland would have similar troubles, Europe, hampered by Germany’s opposition to a bail out, has responded with measures that have been seen as too little too late.
Even now, despite the lashing rhetoric and the Sunday night pan European meeting, there is still a feeling that Europe should be doing more — notably with regard to freeing the European Central Bank to go against its charter and print money by buying back distressed European bonds from the secondary market.
Sunday’s meetings represented an extraordinary convergence of diplomatic activity, crammed into a tight time frame. Political leaders including President Nicolas Sarkozy of France said early Saturday morning, at the end of an earlier summit meeting, that a loan mechanism intended to restore confidence should be ready by Monday morning. That effectively left the European Commission and finance ministers a single weekend to change the way the European Union operates its finances.
Ms. Merkel of Germany attended a victory parade on Red Square in Moscow on Sunday, a sign of how seriously Germans consider reconciliation with Russia. Mr. Sarkozy and the Italian prime minister, Silvio Berlusconi, opted not to attend, regarding the financial crisis as more urgent.
Mr. Sarkozy held a strategy meeting with key ministers on Sunday.
“At stake is the euro and the euro zone,” a French official said. “We need to give a clear signal to markets.” He declined to be identified because talks among the finance ministers were continuing.As a larger European rescue was being debated, the International Monetary Fund’s executive board took the expected step of approving the fund’s $38 billion loan to Greece. And as officials said that the loan would take care of Greece’s financing needs through 2012 they acknowledged that market turmoil had persisted in spite of the Greece plan.
“It’s clear from the developments of the past few days that there is broader stress in the financial markets beyond Greece,” said John P. Lipsky, the fund’s first deputy managing director.
In response to questions about aiding other troubled economies in Europe, Mr. Lipsky emphasized, “There are no program negotiations at this time with either Portugal or Spain.”
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19DecFinancial transaction, Life settlement, banking, breaking market news, breaking news, breaking stock market news, breaking stock news, deals, debt, equity, loan, money, savings, settlement, structured settlements, usa economics No Comments
Seven U.S. banks closed by regulators 140 have failed in 2009
Seven U.S. banks were closed by regulators on Friday, bring the total this year to 140 as the effects of the credit crisis continued to be felt across the country.
What’s more, the Federal Deposit Insurance Corp. established temporary institutions to help close two of the failed banks.
Atlanta-based RockBridge Commercial Bank became the 25th Georgia-based bank to fail this year. The FDIC was unable to find another institution to take over the failed bank, and so will mail checks to retail depositors for insured funds.
RockBridge Commercial Bank had roughly $294 million in assets and $291.7 million in deposits as of Sept. 30. Its failure will cost the federal deposit-insurance fund $124.2 million, the regulator said.
Panama City, Fla.-based Peoples First Community Bank became the 14th to fail in that state in 2009. Peoples First Community Bank had $1.7 billion in deposits as of Sept. 30, and Gulfport, Miss.-based Hancock Bank has agreed to assume those deposits.
Peoples First Community Bank’s failure will cost the deposit-insurance fund $556.7 million, according to the FDIC.
New Baltimore, Mich.-based Citizens State Bank’s failure will cost the deposit-insurance fund $76.6 million, with the FDIC creating the Deposit Insurance National Bank of New Baltimore to protect depositors of Citizens State Bank.
The new bank will remain open for 45 days to allow depositors to access insured deposits and open an account elsewhere, the agency said. Columbus, Ohio-based Huntington National Bank will operate the DINB under contract with the FDIC.
An FDIC spokesman said the agency has created such bridge banks “several times this year and in previous years.”
Irondale, Ala.-based New South Federal Savings Bank also was closed by regulators Friday. The bank had $1.2 billion in deposits as of Sept. 30, which will be assumed by Plano, Texas-based Beal Bank, the FDIC added.
New South Federal Savings Bank’s failure will cost the deposit-insurance fund $212.3 million.
Springfield, Ill.-based Independent Bankers’ Bank was closed, with $511.5 million in deposits as of Sept. 30.
The FDIC said it created the Independent Bankers’ Bank Bridge Bank to allow client banks of Independent Bankers’ Bank “to maintain their correspondent banking relationship with the least amount of disruption.”
Independent Bankers’ Bank’s failure will cost the deposit-insurance fund $68.4 million.
Two Southern California banks were closed Friday, the 16th and 17th such failures in the Golden State as a whole.
First Federal Bank of California in Santa Monica was taken over by regulators. OneWest Bank of Pasadena will assume all of its deposits and take over First Federal’s 39 branches, the FDIC said.
OneWest Bank agreed to purchase all of the $6.1 billion in First Federal Bank assets and did not pay the FDIC a premium for the $4.5 billion in total deposits; the hit to the deposit-insurance fund will be $146 million.
Separately, La Jolla, Calif.-based Imperial Capital Bank was closed. It had $2.8 billion in deposits as of Sept. 30, the FDIC said, and its failure will cost the deposit-insurance fund $619.2 million. City National Bank of Los Angeles is assuming all of the deposits in the “least costly” resolution, according to the agency.
Tags: Seven U.S. banks closed by regulators 140 have failed in 2009
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