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FDIC Friday Night Special: Franklin Bank

From John Letzing over at MarketWatch tonight:

Houston-based Franklin Bank S.S.B. was closed by regulators Friday, the 18th bank failure this year amid the ongoing credit crisis.

The Federal Deposit Insurance Corporation said in a statement that Franklin Bank had total assets of $5.1 billion as of Sept. 30 and $3.7 billion in total deposits…

The FDIC estimated that Franklin Bank’s failure will cost its Deposit Insurance Fund between $1.4 billion and $1.6 billion.

Source:

“Franklin Bank closed, 18th failure this year”
John Letzing
MarketWatch, November 7, 2008

FDIC Friday Night Special- Alpha Bank

Another one bites the dust. MarketWatch’s John Letzing wrote late this afternoon:

Regulators said late Friday they’ve closed Alpharetta, Ga.-based Alpha Bank & Trust — the 16th U.S. bank this year to succumb to the ongoing credit crisis.

The Federal Deposit Insurance Corp. said in a statement that as of the end of September, Alpha Bank had total assets of $354.1 million, and total deposits of $346.2 million. The FDIC said there are roughly $3.1 million in uninsured Alpha Bank deposits in 59 accounts that potentially exceed its deposit insurance limits.

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Source:

“Alpha Bank closed, 16th failure this year”
John Letzing
MarketWatch, October 24, 2008

FDIC Friday Night Double Feature

Two more banks have bit the dust. MarketWatch’s John Letzing wrote tonight:

Northville, Mich.-based Main Street Bank and Eldred, Ill.-based Meridian Bank became the latest victims of the ongoing financial crisis on Friday, when they folded and their deposits were transferred by the Federal Deposit Insurance Corp.

The closures are the 14th and 15th bank failures so far this year.

Letzing noted how much would need to be drawn-down from the FDIC insurance fund:

The FDIC said Main Street Bank’s failure will cost its insurance fund between $33 million and $39 million, while Meridian’s failure will cost the fund between $13 million and $14.5 million.

More to come…

Source:

“Two banks fold, bringing total to 15 failures this year”
John Letzing
MarketWatch, October 10, 2008

$40 Billion Loss Projected For FDIC Deposit Insurance Fund

From the Associated Press yesterday:

The head of the FDIC is asking for an increase in premiums that will double the average paid by U.S. banks and thrifts next year to replenish the deposit insurance fund.

Federal Deposit Insurance Corp. Chairman Sheila Bair is making the proposal at a meeting of the agency’s board. It calls for higher-risk institutions to pay bigger insurance fees than others.

The proposed increase is based on a projected $40 billion loss to the insurance fund from bank failures through 2013. It would reduce the industry’s average pretax income by 5.6% next year, according to FDIC estimates.

Question: if higher-risk institutions have to pay larger fees than others, wouldn’t that make them an even higher-risk? Just curious.

Source:

“FDIC chair asks banks to pay more”
Associated Press, October 7, 2008

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FDIC Friday Night Special: Ameribank

It’s not just Friday night. It’s an FDIC Friday Night— which means another U.S. bank closure. With more to come, according to the head of the Federal Deposit Insurance Corporation. MarketWatch reporter John Letzing wrote this evening:

A tumultuous week for financial markets was capped Friday with the closure of Northfork, W.Va.-based Ameribank Inc., the 12th U.S. bank closure so far this year.

The Federal Deposit Insurance Corporation said in a statement late in the day that deposits at Ameribank’s Ohio branches have been transferred to the Citizens Savings Bank, and Ameribank’s three Ohio branches will reopen Saturday as Citizens Savings Bank branches.

Ameribank’s West Virginia deposits have been transferred to Pioneer Community Bank, and Ameribank’s five West Virginia branches will reopen Monday as Pioneer branches, according to the FDIC.

As of June 30, Ameribank had $115 million in total assets and total deposits of $102 million, the regulator said.

Earlier today, FDIC Chairman Sheila Bair predicted there will be additional bank closures in the future. From the CNBC website:

There will be more U.S. bank failures as the global credit crisis continues, Federal Deposit Insurance Corp Chairman Sheila Bair said Friday.

“There’s going to be more, no doubt about it. We are in a challenging environment,” Bair said at a panel discussion at the New York Stock Exchange.

Banks have been struggling to survive amid a severe downturn in the housing market and tight lending conditions.

“We have industry reserves of $45 billion, but we also have longstanding lines of credit with the Treasury, so if need be, we have wide flexibility to borrow from the Treasury,” Bair reassured investors on CNBC.

“We’re explicitly backed by the full faith and credit of the United States government. People really don’t have anything to worry about,” she said.

And that’s when the red flag went up…

Note the fine print

Sources:

“Ameribank folds, 12th bank closure this year”
John Letzing
MarketWatch, September 19, 2008

“More US Bank Failures Coming: FDIC’s Bair”
CNBC, September 19, 2008