Posted on 01/29/2010 7:26:47 PM PST by DoctorBulldog
Well, that makes 153 Banks that have failed since Obama took office. Of course, Bush's total for his entire eight years was only 53. Woooohoooo! Way to go there, Barry! How's that massive Bank Bailout working for ya'?
The following banks were added to the FDIC's Failed Banks list:
American Marine Bank Bainbridge Island WA
First Regional Bank Los Angeles CA
Community Bank and Trust Cornelia GA
Marshall Bank, N.A. Hallock MN
Florida Community Bank Immokalee FL
First National Bank of Georgia Carrollton GA
Now, I first noticed them doing this back in December when they had a larger than normal list of bank failures.
It's not like it takes them hours upon hours to type the Bank information into the form. I'm pretty sure they already know which banks have already failed during the week come Friday evening when they post their list online. After all, the banks have usually already been auctioned off.
My suspicion is that they when they have an obscene number of bank failures to post, they slowly add them, in hopes that Newspaper editors will check the total early in the evening, before going to press, and thus, misreport the numbers as being lower than what they really are.
Anyway, that's the only thing that makes sense to me. Any ideas, anyone?
Friday night news dump.
failing or being taken over?
Failed and being auctioned off to the banks that Obama gave the Bailout Money to, is my guess.
Cheers
Having talked to a banker who was involved in a take-over of a failing bank (ie, they were offered the failing banks assets by the FDIC a couple days before the announcement), the logistics are such that I think the announcements are sent out as they get word from the FDIC field teams who are seizing the failed bank. ie, the press release doesn’t go out until the field team leader calls DC to OK the announcement.
So, what you are saying is that the FDIC isn’t getting notified until after 8:00 p.m. EST on Friday night? Why doesn’t the FDIC just wait until next Friday to post it?
Hmmm... Certainly is a puzzler.
Cheers
Here’s how the logistics work:
The FDIC waits until closing time of the bank they’re targeting to close. They wait until after the last customer has left, then a couple of them walk into the bank in plainclothes, flash a badge/ID, ask to see the highest level bank officer in the building and they go into a back room. The employees don’t know what it going on at this point.
The FDIC spells out the situation to the banking officer(s) that they can find, saying “You’re a failed bank, we’re taking you over.” There’s no arguing about the issue. In most all cases, the FDIC or other banking regulator (or possible the FDIC *and* other regulators) have sent the bank notices of non-conformance with regulatory limits on capital, or offerings prior to the take-over, so it usually isn’t a complete surprise (unless the bank officers have been deluding themselves).
If the senior level banking officers are off-site, the FDIC gets hold of them by phone, asks them to come in (if possible) and then sets about seizing all records, deposits, loan docs, etc. The employees in the bank are often pulled into the takeover logistics, but they’re not allowed to talk about it until the bank is open for business again. If the failed bank has been offered up to other banks as a take-over target and a bank has made an acceptable take-over offer, the acquiring bank is notified that the FDIC is in the failed bank, etc. Here’s an example:
The whole thing is done in a very co-ordinated manner. The FDIC employees show up in the town of the target failed bank a week to 30 days ahead of the seizure, and they check into a variety of hotels in the area under false names. The FDIC will try to spread their people around so that there isn’t this “big bunch of Feds” staying in one hotel. The failing bank’s assets are shopped around to other banks under a strict non-disclosure agreement.
Some banks on the left coast might well be open until 1800 local on a Friday night, which means that even if the FDIC agents taking the bank over notified the DC office as soon as they were inside, the DC office wouldn’t know about it until after 2000 Eastern.
In short, to make the bank transition as smooth as possible, the FDIC does a lot of things in secret, with a great deal of attention to time co-ordination of who gets what information. That includes the public.
There’s nothing productive to be gained in waiting to post until the following Friday. People want to know that their money is safe. This is why the FDIC takes over banks a) after the close of business, b) on a Friday, c) with a succession plan (either another bank or FDIC management) previously planned at least two days ahead of time.
When I was in banking, it was pretty standard to “takeover” a failed bank or S&L on Friday after close of business.
This info was to be kept private until the bank was closed and all assets secured. Sometimes the bank itself had been seeking to merge or be aquired by another institution.
After due-diligence, if the potential buyer felt that there was too many bad loans,and the parties could not reach agreement, then the feds would step in.
Often they could then fashion a deal which would be more attractive to the buyer, and would still cost the FDIC less money than just taking over the bank (ie nationalizing).
During the S&L crisis, they got so good at it, that the S&L closed on Friday, and then reopened on Monday with a new name and barely a ripple to note the change.
Thank you for all info. That certainly has helped me to understand what is going on with that FDIC list. I really appreciate it.
Cheers
Erratum: That first sentence should have said, “Thank you all for the info.”
Sorry about that. I have a two-year-old that likes to keep me distracted when I’m on the computer.
Cheers
Is this a clear cut process? Does anyone have info on how it works or a cumulative tally? I’m curious about the states that seem to be hit often, and wondering about the political affiliations.
The process for taking over a failed bank is pretty clear and clean cut. The FDIC has it down to practically a cookie-cutter routine now.
There is info on the FDIC site about all manner of things in their area of the banking industry. For the failed bank list:
http://www.fdic.gov/bank/individual/failed/banklist.html
For some insight into what is going on within the banking industry that the FDIC supervises, I’d recommend the “Quarterly Banking Profile,” which is available here:
http://www2.fdic.gov/qbp/index.asp
As to political affiliations, all I could suggest is that you look in the FEC database for bank officers’ political donations.
Sounds about right. They trickle them out at just long enough intervals to insure that they get reported in small batches, and you have to be really paying attention to realize how many there really are.
internets/ping
You almost make it sound like a well thought out and intelligently implemented plan. This is the federal government you’re talking about, right?
Yep.
There are some agencies that do a reasonable job. The FDIC appears to be good at taking down banks after their capital ratios require it, but utterly incompetent at using their regulatory powers to prevent the banks from getting into a precarious situation in the first place.
Go figure.
370 banks list FDIC as a scam and failure for America!
thats what i am thinking....i call it a takeover...and they are using our money to do it
Great post, very informative. Thanks.
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