Internet Bank Failure and the first bank failure since 1990's S&L crisis

[whistle]

...Anyone on DU affected by this or know antone who has been affected?

<snip>
September 28, 2007 | Posted By Scott Riddle
Internet Lender NetBank Closed by Feds; Largest Bank Failure In Georgia History
From the Atlanta Business Chronicle -

The Federal Deposit Insurance Corp. and Office of Thrift Supervision shuttered NetBank on Friday, putting its approval on ING Bank's assumption of the failed bank's insured deposits.

NetBank is the largest bank failure in Georgia history, is the second FDIC-insured bank to fail this year and is the first in the state since AmTrade International Bank of Atlanta closed in September 2002.

NetBank primarily issued subprime and adjustable rate mortgage loans backed by online national deposits. The company issued mortgage loans particularly in southwest Florida, an area hard hit by the housing slowdown and mortgage meltdown.

Further information about the closing may be obtained at the FDIC website (click here).

From the company's website --

On September 28, 2007, NetBank, Alpharetta, GA was closed by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a business checking account, a Social Security direct deposit, and other relationships with the institution.

The NetBank web site will be closed from 3:00 pm to 6:00 EST, on September 28th and will reopen in a read only mode. Normal online services will be restored in the early evening Sunday, September 30th.

http://www.georgiabankruptcyblog.com/archives/news-and-comments-internet-lender-netbank-closed-by-feds-largest-bank-failure-in-georgia-history.html

[Fed_Up_Grammy]

1. ING taking over---- it should be okay .

[originalpckelly]

2. Dayum.

It's sad to see the best of our system look so awful. Whether we like it or not, this is the self-regulation of capitalism at work (and no, I don't mean non-regulation, WTF do you think FDIC is?)

[BrklynLiberal]

3. Speaking of which..wasn't a Bush involved in that one too?????

[flvegan]

4. Will we see another Resolution Trust Corporation?

This could get really ugly.

[murloc]

5. Affects me

Freaked me out bigtime today when I logged on to do some Internet banking.

I went to an ATM and did manage to retrieve some cash. According to what I can see, checks should clear normally. Time will tell

Of course being a weekend, I can't find anyone to talk to.

[whistle]

6. Supposedly they begin doing business at 12:01am Oct 01, 2007

...The best of luck to you and I sincerely hope you are able to get to your funds. I have attempted to find other information on their situation and also any backup regarding some of the posts here. This is the latest I found this morning which corroborates much of my OP:

<snip>
NetBank Files for Bankruptcy After Regulators Take Over Unit

By Bill Rochelle

Sept. 29 (Bloomberg) -- The parent of NetBank, a pioneer in Internet banking, filed for bankruptcy protection after the savings-and-loan became the first in three years to fail.

The filing in U.S. Bankruptcy Court by NetBank Inc. in Jacksonville, Florida listed assets of $87.2 million and debt totaling $42.4 million.

The bankrupt holding company plans to sell real estate it owns in Columbia, South Carolina and its captive reinsurance subsidiary M.G. Reinsurance Inc. The Chapter 11 filing occurred after a sale of the savings-and-loan fell through and it was taken over by the Federal Deposit Insurance Corp. following a shutdown of the unit by U.S. regulators.

Federal law prohibits the savings-and-loan subsidiary from filing for bankruptcy protection from creditors like its parent. Federally chartered banks cannot be reorganized and must be liquidated by the FDIC.

NetBank was founded in 1996 and went public in 1997. The bank had 286,000 customers and $4.8 billion in assets in 2005 before online competition from national and regional banks eroded the business.

The bank's failure this year was the result of margin compression from an inverted yield curve, fewer mortgage originations, and demands to repurchase delinquent loans, according to a bankruptcy court filing.

As part of the FDIC takeover, ING Bank announced it is assuming $1.4 billion of the failed bank's deposits and 104,000 of its customers while EverBank Inc. acquired $700 million of NetBank's mortgage assets.

The savings-and-loan subsidiary had $2.5 billion in assets and $2.3 billion in total deposits as of June 30, according to the FDIC.

NetBank said in filings with the Securities and Exchange Commission that its executive offices are in Alphafretta, Georgia while the bankruptcy petition listed Jacksonville as the main office.

NetBank's stock closed Sept. 28 at 7 cents a share, down 1 cent in over-the-counter trading.

The case is In re NetBank Inc., No. 07-04295, U.S. Bankruptcy Court, Middle District Florida (Jacksonville).

To contact the reporter on this story: Bill Rochelle in New York at [email protected] .

Last Updated: September 29, 2007 16:06 EDT

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajOPHuXaoV3c&refer=home

[murloc]

7. Was supposed to have access to my accounts today

But the time keeps getting pushed back.

Who knows when it will really happen.