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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20MayFinancial transaction, Movers & Shakers, daily stock picks, daily stock tips, daytrades, deals, financial settlement, free stock info, free stock picks, free stock tips, market projections, markets, short term investments, stockmarket analysis, stocks, technical analysis, trading, trading ideas, usa economics No Comments
Wednesday:
Volume quietly increased today as the S&P 500 lost another half percent. Although the market staged a rally late to recover most of its losses. With the volume starting to increase now as the market goes down, the next few days will be very interesting. The market could challenge the lows made a couple weeks ago. We could see a market malaise set in that brings the indices lower on lower volume. However, if the volume remains lower than the first leg down, we should see a strong rebound shortly thereafter.
Market downtrends are notorious for quick, vigorous rebounds followed by more selling.
Keep your stops tight and be safe.Dow Futures are currently flat to slightly up +7.
Friday is an options expiration day, be cautious here.
Tags: Markets outlook for the trading session Thursday 05.20.2010, stock market outlook
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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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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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13Marbreaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, deals, trading, trading ideas No Comments
CF seals $4.7 billion deal for Terra
After a yearlong pursuit CF lands Terra in a $4.7 billion deal that creates fertilizer giant
AGU 72.10 +5.32
CF 96.73 -3.88
TRA 46.33 -0.57After more than a year of bids and counterbids, CF Industries landed Terra Industries on Friday for $4.7 billion in a deal that will create one of the world’s largest fertilizer companies.
The announcement came just hours after Norway’s Yara International, which had been vying for Terra as well, said it would not top the latest bid by CF Industries.
The deal was approved by the boards of both companies after one of the longest running takeover fights in recent years.
“A combined CF Industries and Terra creates a strong leader in the global fertilizer industry with superior assets that will generate long-term value for stockholders, provide more benefits to customers and offer increased opportunities to employees,” said Stephen Wilson, the chief executive at CF. “We are excited to begin working together to become a more competitive global fertilizer player with enhanced scale, a broader strategic platform and enhanced access to capital markets.”
Soaring commodity prices have created a lot of energy in the agriculture sector. Terra and CF have a combined annual revenue of $4.2 billion.
CF and Terra say the tie up will save them around $135 million each year because they will be able to cut overlapping transportation and corporate costs.
Terra Industries Inc., based in Sioux City, Iowa, said it has ended negotiations with Yara, the world’s largest fertilizer company, which had offered $4.1 billion.
Earlier this week, Terra notified both companies that it favored the bid from CF, which amounts to $37.15 in cash per share and nearly one-tenth of a share of common stock for each Terra share.
Terra gave Yara five days to decide if it would bid again, but the company gave its response in two.
In addition to landing Terra, CF Industries also shook free of Canadian fertilizer company Agrium Inc. Agrium had been pursuing CF in prevent its buyout of Terra, but dropped its $5.5-billion takeover bid for CF on Thursday.
Terra had repeatedly rejected CF’s previous offers. CF had vowed to end its hostile bids, but went back on the offensive after Terra agreed to Yara’s deal. CF is based in Deerfield, Ill.
Terra clients are largely industrial, while CF Industries focuses on agricultural customers.
Shares of CF Industries Holdings Inc. fell $4.29, or 4.3 percent, to $96.32. Terra’s stock fell 69 cents, or 1.5 percent, to $46.21.
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21Febbanking, cash, credit, deals, government, leverage, liquidity, loan, market facts, money, return rate, savings, stockmarket analysis, trading ideas, trend, usa economics No Comments
What you need to know about credit card reform
The new credit card regulations are finally here. Starting Monday, Feb. 22, 2010, banks will need to abide a spate of new rules on terms and disclosures. The idea behind the landmark law was to prevent banks from using unfair practices that dig borrowers deeper into debt.
The new credit card law is finally here. Starting Monday, banks will need to abide by new regulations on terms and disclosures. The idea behind the landmark law was to prevent banks from using practices that often dug borrowers deeper into debt.
A look at how the credit card law affects key aspects of your account.INTEREST RATES
THEN: Banks could raise the interest rate on an account at any time, including the rate on an existing balances, even if you weren’t late on payments.
NOW: The rate cannot be raised in the first year after an account is opened unless an introductory rate has come to an end. After that, cardholders must be notified 45 days in advance of any rate change.
For existing balances, rates can’t be raised unless the account is at least 60 days past due. If payments are made on time for six consecutive months, the original rate must be restored.
There’s still no cap on rates.
DISCLOSURES
THEN: The fine print on cardholder agreements was often difficult to understand. Rates, fees and penalties for other services such as cash advances, for example, could be hard to find. The impact of the interest rate on paying down a balance was hard to compute.
NOW: Cardholders will see how many months it will take to pay off a balance if only minimum payments are made. Statements will also indicate how much needs to be paid each month to pay off a balance within three years.
SERVICE FEES
THEN: Banks could charge as much as they wanted. They could assess annual fees, activation fees and other fees. This was mostly a problem for subprime cards marketed to those with poor credit scores. One popular card, for example, the Premier Bankcard, charged $256 in first-year fees for a $250 credit line.
NOW: Service fees, such as activation and annual fees, will be capped at 25 percent of the credit limit during the first year of use. After that, there is no cap.
GRACE PERIODS
THEN: Some card companies sent out statements not long before payments were due, and sometimes shifted payment due dates from month to month, meaning that payments would not always have enough time to arrive and get processed before being deemed late. As a result, some cardholders ended up getting charged interest or late fees even when they thought they were sending in payments on time.
NOW: The law requires that due dates remain consistent. Statements must be sent out 21 days before the payment due date, and finance charges and fees cannot be applied before that period is up. In practice, about half of card issuers have extended grace periods to as long as 25 days.
OVER-THE-LIMIT FEES
THEN: Banks set credit limits, then routinely allowed charges to exceed those limits. When that happened, though, the customer was charged an over-the-limit fee as high as $39. These fees were often triggered by interest charges or late-payment fees that pushed a balance over the credit limit. What’s more, multiple over-the-limit fees could get charged in a single billing cycle if the balance was paid down and another charge pushed the balance back over the limit.
NOW: The cardholder must specifically agree to permit transactions that exceed the credit limit. Only then can over-the-limit fees be charged. But the fees can’t be triggered by other fees or interest charges. Only one over-the-limit fee may be imposed during a billing cycle. No over-the-limit fees may be charged unless the cardholder has specifically agreed to permit transactions exceeding their authorized credit limit. These fees can no longer be triggered by other fees or interest charges imposed by the card issuer, and only one such fee may be imposed during a billing cycle.
In practice, several of the largest card companies have dropped these fees. Some banks are using pop-up boxes on their Web sites or other methods to obtain consumer authorization.
UNIVERSAL DEFAULT
THEN: If you made a late payment on one credit card or loan, or even late payments for obligations like utility bills, that could trigger interest rate hikes on other credit card accounts.
NOW: Card companies cannot raise interest rates on existing credit card balances. Interest rates can’t rise during the first year an account is open, unless the original agreement spelled out a promotional rate for a limited time.
Consumers with older accounts must be informed of any interest rate increase on new charges at least 45 days in advance. They must also be given a chance to opt out of the hike by canceling the account and paying down the balance at the old interest rate. If an interest rate is increased, the card company must review the account once every six months to assess whether the rate should be dropped.
STUDENTS
THEN: Students arriving on college campuses often confronted a gantlet of credit card marketers handing out T-shirts, pizza and other gifts in exchange for filling out card applications. Credit cards were frequently handed out without checking the applicant’s income sources. In 2008, 84 percent of undergraduates had at least one credit card. Average balances topped $3,100.
NOW: Credit cards may no longer be issued to anyone under age 21, unless the applicant has a co-signer, or can show independent means to repay the debt. Colleges must disclose any marketing deals they make with credit card companies. Banks are not allowed to hand out gifts on or near campuses or at college-related events.
Tags: credit card, credit card regulations, What you need to know about credit card reform
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09JanFinancial transaction, breaking news, cash, deals, financial settlement, money, return rate, usa economics No Comments
1913 Nickel Sells for $5 Million
1913 Liberty Nickle 5 million dollars
Some may call this unnamed collector crazy for spending a cool one hundred million times the face value of a 1913 nickel. Others envy the ability to drop $5 million on a single purchase that you can’t live in. Whatever your opinion may be, for numismatists, the 1913 Liberty Nickel is one of the most highly sought after and prized coins in United States history.
You have to wonder what the collector is going to do with it. One would assume they’ll want to admire it in their own hands, but they’ll have to be awfully careful with it. Imagine the frustration of accidentally flushing it down the toilet or having it slip through a hole in their pocket. It’s not the kind of thing you can replace you know.Concerns for its well being aside.
An unnamed California collector has paid $5 million for the Eliasberg specimen 1913 Liberty Head nickel, a record price for the coin and the second highest price ever paid for any rare coin.
“The new owner is a long-time Southern California resident and a dedicated collector of historic United States rare coins,†said Santa Barbara coin and jewelry merchant, Ronald J. Gillio, who negotiated the sale between the collector and the sellers, Legend Numismatics of Lincroft, New Jersey and Washington state business executive, Bruce Morelan.
Legend and Morelan jointly purchased the coin from New Hampshire dealer, Ed Lee, in May 2005 for a then-record price of $4,150,000. It is graded Proof-66 by Professional Coin Grading Service, and is the finest of the five known 1913 Liberty Head nickels.
Gillio said he talked with the collector about the coin for over three months.
“We spoke many times in recent months about the coin’s legendary numismatic status, and he agreed to purchase it for $5 million,” explained Gillio who recently was named Numismatic Acquisition Coordinator for Spectrum Numismatics International and Bowers and Merena Auctions, and continues his role for Collectors Universe as General Chairman of the Long Beach and Santa Clara Coin, Stamp & Collectibles Expos.
The unnamed collector took possession of the coin at an undisclosed Southern California location on Wednesday, April 25.
In 1913 the United States Mint introduced a new design for nickels depicting a Native American Indian on the front and a bison on the back. However, some nickels were struck dated 1913 using the previous year’s design of a symbolic “Miss Liberty.”
Only five 1913 Liberty Head nickels are known today. Two are in permanent museum collections at The Smithsonian in Washington, DC and the American Numismatic Association Money Museum in Colorado Springs, Colorado.
One of the previous owners of this particular 1913 Liberty Head nickel was renowned Baltimore banker, Louis E. Eliasberg Sr., known to collectors for the extensive, one-of-everything collection he assembled before his death in 1976.
“Weâ€re pleased that this coin now is in the collection of another devoted numismatist. We hope he enjoys it as much as we did,” said Laura Sperber, a partner in Legend Numismatics.
The worldâ€s record price for any rare coin is $7.59 million paid for a 1933 U.S. $20 denomination Double Eagle gold coin in July 2002.
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07Janbanking, breaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, daily stock picks, daily stock tips, daytrades, deals, loan, money, savings, structured settlements, trading ideas, trend No Comments
JANUARY 7, 2010, 1:33 A.M. ET
China Raises Key Interbank Rate
China’s central bank unexpectedly raised a key interbank market interest rate Thursday for the first time in nearly five months, signaling a change in its policy focus toward pre-empting inflation risks in the new year.
The tightening move, in the form of a higher yield in its weekly bill sale, came less than a day after the People’s Bank of China hinted its priorities had shifted toward managing inflation expectations and away from single-mindedly supporting economic growth.
It also shows the PBOC still prefers using liquidity management tools, rather than policy interest rates, to guide market funding costs.
Tags: China Raises Key Interbank Rate, rate increase, U.S. Dollar
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25DecFinancial transaction, Movers & Shakers, breaking market news, breaking news, breaking stock market news, breaking stock news, breaking wall street news, daily stock picks, daily stock tips, daytrades, deals, financial settlement, free stock info, free stock picks, free stock tips, leverage, liquidity, market analysis, market projections, markets, money, return rate, short term investments, stockmarket analysis, stocks, technical analysis, trading, trading ideas, trend, usa economics No Comments
Stockshakers are looking to go LONG FRE and FNM
Options are very cheap and thinly traded.
U.S. Ends Cap on Fannie, Freddie Lifeline for 3 Years
The U.S. Treasury Department will remove the caps on aid to Fannie Mae and Freddie Mac for the next three years, to allay investor concerns that the companies will exhaust the available government assistance.
The two companies, the largest sources of mortgage financing in the U.S., are currently under government conservatorship and have caps of $200 billion each on backstop capital from the Treasury. Under the new agreement announced today, these limits can rise as needed to cover net worth losses through 2012.
The Obama administration is “beginning to realize it’s not getting better and it’s not likely to get better” soon in the housing market, said Julian Mann, who helps oversee $5.5 billion in bonds as a vice president at First Pacific Advisors LLC in Los Angeles. “They don’t want the foreclosures now, so they’re saying, we’ll pay whatever it takes to continue to kick the can down the road.”
Fannie Mae and Freddie Mac now are using a combined $111 billion of the total $400 billion lifeline. Treasury Department officials said they didn’t expect the companies to need assistance beyond what is available under the current caps, barring significant deterioration in the economic outlook.
Today’s announcement “should leave no uncertainty about the Treasury’s commitment to support these firms as they continue to play a vital role in the housing market during this current crisis,” the Treasury said in a statement in Washington.
Portfolio Size
The Treasury also relaxed its timeline for Fannie Mae and Freddie Mac to shrink their portfolios of mortgage assets. Previously, the companies were instructed to reduce their portfolios at a rate of 10 percent a year. Now, they will be required to keep the value of their portfolios below a maximum limit, currently $900 billion, that will go down by 10 percent a year.
This means they will not need to take immediate action to trim their holdings and could allow them to rise. Fannie Mae’s portfolio ended October at $771.5 billion and Freddie Mac’s holdings at the end of November were $761.8 billion, according to the latest figures released by the companies.
“Treasury does not expect Fannie Mae and Freddie Mac to be active buyers to increase the size of their retained mortgage portfolios, but neither is it expected that active selling will be necessary,” the Treasury said.
Fed Program
The change in the portfolio limits may ease investor concern that the companies could be forced to shrink their portfolios at the same time that the Federal Reserve ends its $1.25 trillion mortgage-bond purchase program. That could have exacerbated pressure on mortgage rates caused by the end of the Fed program, Laurie Goodman, an analyst in New York at Amherst Securities Group LP, said this month.
The Treasury said today that it is ending its mortgage- backed security purchase program as of Dec. 31, after about $220 billion in purchases. The government also is eliminating a short-term credit facility for the two companies and the Federal Home Loan Banks that was never used.
Also today, the companies disclosed in regulatory filings that Fannie Mae Chief Executive Officer Michael Williams and Freddie Mac CEO Charles Haldeman Jr. are each eligible for compensation of as much as $6 million this year.
Executive Pay
Pay at the mortgage-finance companies, which were seized by the U.S. in September 2008, added to debate over salaries for executives at companies dependent on government bailouts. Compensation must be sufficiently high to “attract and retain” top talent, their regulator, the Federal Housing Finance Agency, said in a statement.
In addition to the CEO pay, 10 additional executives at the two companies are eligible collectively for $30.1 million in compensation for this year. Overall, pay for top executives of the mortgage-finance companies is down 40 percent from before they were seized, the regulator said.
Brian Faith, a Fannie Mae spokesman, and Michael Cosgrove, a Freddie Mac spokesman, declined to comment on the executive compensation and didn’t immediately return messages on the later Treasury announcement.
The Obama administration is still developing its long-term plan for Fannie Mae and Freddie Mac. In today’s statement, the department said it expected to release a preliminary report on the companies as part of the 2011 budget, due in February.
‘Prudent’ Policy
Recent announcements from the companies and the Federal Housing Administration “demonstrate a commitment to prudent housing finance policy that enables a transition to an environment where the private market is able to provide a larger source of mortgage finance,” the Treasury said.
The Treasury and Federal Housing Finance Agency seized control of the mortgage-finance companies almost 16 months ago amid fears the two were at risk of failing. The government- sponsored enterprises, or GSEs, own or guarantee about $5.5 trillion of the $11.7 trillion in U.S. residential mortgage debt.
Officials set up the Treasury lifelines, which were expanded in May, to keep the companies solvent. If the two firms exhaust that backstop, regulators will be required to place them into receivership.
Treasury officials weren’t likely to take the chance of allowing the companies to fall into receivership, which is a bankruptcy-like process that would increase the companies’ debt costs and disrupt the mortgage markets, Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia, said in an interview last week.
GSE Losses
Washington-based Fannie Mae has lost $120.5 billion over the past nine quarters and McLean, Virginia-based Freddie Mac has recorded $67.9 billion in cumulative losses over the past nine quarters amid a three-year housing slump.
The companies are an integral part of President Barack Obama’s housing-relief plan and have been pushed by the government to help more homeowners renegotiate their mortgages to stay out of foreclosure.
As part of today’s announcements, made ahead of a Dec. 31 expiration of some of the Treasury’s authority, the department said it would delay setting certain fees connected with the assistance program until the end of next year. The Treasury also made technical changes that affect the definition of mortgage assets and other accounting issues.
Tags: call options, fnm, fre, Freddie Lifeline for 3 Years, long, U.S. Ends Cap on Fannie
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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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