I love the way they are staging these bank closings over the weekend.....no hysteria, no muss, no fuss, no inconvenience. But will the FDIC have enough in reserve to cover the costs? That is the million question at this point.
Fla. Bank Shuttered; SunTrust to Take Over Branches
By David Mildenberg and Alison Vekshin
Bloomberg News
Saturday, August 2, 2008; Page D03
First Priority Bank of Bradenton was closed by Florida state regulators yesterday, the eighth bank to collapse this year as lenders grapple with failed loans and writedowns stemming from a slump in home prices.
First Priority, with $259 million in assets, was turned over to the Federal Deposit Insurance Corp., the agency said in a statement. The bank's deposits were sold to SunTrust Banks, and six First Priority branches will open Monday as SunTrust offices, the FDIC said.
The pace of closings is accelerating. Banks and securities firms have reported more than $480 billion in writedowns and credit losses since 2007, when three banks were shuttered.
Regulators in July closed IndyMac Bancorp, a California-based mortgage lender with $32 billion in assets, the third-largest bank seizure in U.S. history.
"The only thing sure other than death and taxes is that deposit insurance premiums will be going up as more banks fail," said Gerard Cassidy, an analyst with RBC Capital Markets in Portland, Maine. He expects 300 U.S. banks to fail in the next several years, mainly because of mounting losses from real estate-related loans.
SunTrust will buy about $227 million in deposits for no premium, while acquiring about $42 million in assets, the FDIC said. The transactions will cost the U.S. deposit insurance fund an estimated $72 million, the FDIC said.
read more........
washingtonpost.com |
