U.S. bank failures total 108 after 5 shut on Friday (Update:12 Banks Total Shut Today)

[OhioChick]

Source: Reuters

Saturday July 31, 2010 01:56:02 PM GMT

WASHINGTON, July 30 (Reuters) - U.S. bank failures reached 108 so far in 2010 on Friday as regulators seized five small banks in the Pacific Northwest and the Southeast, none publicly traded.
Bank failures are expected to peak this quarter, with the industry slowly recovering from large portfolios of bad loans, many tied to commercial real estate.

The banks seized on Friday were LibertyBank of Eugene, Oregon; The Cowlitz Bank of Longview, Washington; Coastal Community Bank of Panama City Beach, Florida; Northwest Bank & Trust of Acworth, Georgia; and Bayside Savings Bank of Port Saint Joe, Florida, according to the Federal Deposit Insurance Corp.

The five banks would cost the agency's deposit insurance fund about $335 million, the FDIC said.

The largest of the five banks was LibertyBank with 15 branches and about $768.2 million in total assets and $718.5 million in total deposits. The smallest was Bayside Savings Bank with just two branches and $66.1 million in total assets and $52.4 million in deposits.


Read more: http://www.forexyard.com/en/news/bank-failures-total-108-after-5-shut-on-Friday-2010-07-31T025613Z-US

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http://www.fdic.gov/bank/individual/failed/banklist.html

[Alcibiades]

1. It's the fault of the CRA!

Of course, if it were just the CRA, then we would expect that bank failures would be evenly distributed. Doesn't explain this:


Crescent Bank and Trust Company Jasper GA
First National Bank Savannah GA
Satilla Community Bank Saint Marys GA
Unity National Bank Cartersville GA
McIntosh Commercial Bank Carrollton GA
Bank of Hiawassee Hiawassee GA
Appalachian Community Bank Ellijay
Century Security Bank Duluth GA
Community Bank and Trust Cornelia GA
First National Bank of Georgia Carrollton GA
RockBridge Commercial Bank Atlanta GA
The Tattnall Bank Reidsville GA
First Security National Bank Norcross
The Buckhead Community Bank Atlanta GA
United Security Bank Sparta GA
American United Bank Lawrenceville GA
Georgian Bank Atlanta GA
First Coweta Bank Newnan GA
ebank Atlanta GA
Security Bank of Jones County Gray GA
Security Bank of Houston County Perry
Security Bank of Bibb County Macon GA
Security Bank of North Metro Woodstock GA
Security Bank of North Fulton Alpharetta GA
Security Bank of Gwinnett County Suwanee GA
First Piedmont Bank Winder GA
Neighborhood Community Bank Newnan GA
Community Bank of West Georgia Villa Rica GA
Southern Community Bank Fayetteville GA
Silverton Bank, NA Atlanta GA
American Southern Bank Kennesaw GA
Omni National Bank Atlanta GA
FirstCity Bank Stockbridge GA
Freedom Bank of Georgia Commerce GA
FirstBank Financial Services McDonough GA
Haven Trust Bank Duluth GA
First Georgia Community Bank Jackson GA
Community Bank Loganville GA
Alpha Bank & Trust Alpharetta GA
Integrity Bank Alpharetta GA
NetBank Alpharetta GA
AmTrade International Bank
En Español Atlanta GA

The tenth largest state is number one, in absolute terms, if not dollar terms, in bank failures. Could it be because Georgia banking regulators applied the Republican philosophy of loose regulation? And now the FDIC must bear the cost of their failed experiment.

[SLCLiberal]

3. CRA lies

Doesn't it drive you nuts with the right wing lies about the CRA? The majority of subprime loans were made by mortgage companies propped up by wall street and had nothing to do with the CRA. Of course the same morons scream "Quit blaming everything on Bush" but go all the way back to Jimmy Carter on this one. What a joke.

[clarence swinney]

2. Fed and Fannie

Fed holds mortgages
In 2009, purchased over 1 trillion worth from troubled banks.
Now does not want them and cannot unload them.
WSA Power in Treasury and Fed!!! Help our pals.
Expect to sell gradually as economy recovers.
Fed became one of largest world's mortgage investors because no one else was interested.
During Fall 2008, investors stopped buying mortgage securities
issued by Fannie Mae and Freddie Mac. The two public traded companies-for profit—bought mortgages made by Banks and other lenders, providing money for new rounds of lending, then package those loans into securities for sale to investors. Replenishing their own coffers.

Two days before Thanksgiving 2009, Fed announced it would buy $500 Billion in securities issued by the two companies. By the time the program wound down in March 2010, it had spent more than twice that amount. The Fed now owns mortgage securities with a face value of $1.1 Trillion.

Now comes the Cleanup. Fed can hold the securities until borrowers repaid or refinanced the homes.
Fed expects borrowers will repay $200 Billion by end of 2011. In the meantime, the Fed is collecting regular “interest” payments. Bernanke told Congress-”We've been earning a fairly high income from our holdings and remitting that to the treasury.”

The Fed bought the securities by pumping new money into the economy to stimulate growth.
By selling it will drain money from the economy.
The Fed paid some of the highest prices on record for mortgage securities.
There are no good choices for the Fed. Some Fed officers say raise interest rates before beginning to sell the securities.
Article by binyamin applebaum nyt
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