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Old 08-14-2009, 11:19 PM   #1
Steve_A
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Default Colonial Bank Goes Bust

Hi Everybody,

Just in. Colonial Bank in the US has just gone bust.

More information when I can get hold.

Update:

"Colonial Bank, Montgomery, Alabama, was closed today by the Alabama State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

Colonial Bank's 346 branches in Alabama, Florida, Georgia, Nevada and Texas will reopen under normal business hours beginning tomorrow and operate as branches of BB&T. ..."

http://www.calculatedriskblog.com/20...-colonial.html

Best regards,

Steve

Last edited by Steve_A; 08-14-2009 at 11:26 PM.
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Old 08-15-2009, 01:41 AM   #2
Northern Boy
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Default Re: Colonial Bank Goes Bust

Toxic Loans Topping 5% May Push 150 Banks to Point of No Return

http://www.bloomberg.com/apps/news?p...d=aTTT9jivRIWE


By Ari Levy

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

The biggest banks with nonperforming loans of at least 5 percent include Wisconsin’s Marshall & Ilsley Corp. and Georgia’s Synovus Financial Corp., according to Bloomberg data. Among those exceeding 10 percent, the biggest in the 50 U.S. states was Michigan’s Flagstar Bancorp. All said in second- quarter filings they’re “well-capitalized” by regulatory standards, which means they’re considered financially sound.

“At a 3 percent level, I’d be concerned that there’s some underlying issue, and if they’re at 5 percent, chances are regulators have them classified as being in unsafe and unsound condition,” said Walter Mix, former commissioner of the California Department of Financial Institutions, and now a managing director of consulting firm LECG in Los Angeles. He wasn’t commenting on any specific banks.

Missed payments by consumers, builders and small businesses pushed 72 lenders into failure this year, the most since 1992. More collapses may lie ahead as the recession causes increased defaults and swells the confidential U.S. list of “problem banks,” which stood at 305 in the first quarter.

Cash Drain

Nonperforming loans can eat into a company’s earnings and deplete cash, leaving banks below the minimum capital levels required by regulators. Three lenders with nonaccruing ratios of at least 6.2 percent as of March were closed last week. In addition, Chicago-based Corus Bankshares Inc., Austin-based Guaranty Financial Group Inc. and Colonial BancGroup Inc. in Montgomery, Alabama, each with ratios of at least 6.5 percent, said in the past month that they expect to be shut.

“This is a fairly widespread issue for the larger community banks and some regional banks across the country,” said Mix of LECG, where William Isaac, former head of the Federal Deposit Insurance Corp., is chairman of the global financial services unit.

Ratios above 5 percent don’t always lead to failures because banks keep capital cushions and set aside reserves to absorb bad loans. Banks with higher ratios of equity to total assets can better withstand such losses, said Jim Barth, a former chief economist at the Office of Thrift Supervision. Marshall & Ilsley and Synovus said they’ve been getting bad loans off their books by selling them.

Exclusions

Bloomberg’s list was compiled by screening U.S. banks for nonperforming loans of 5 percent or more, and then ranked by assets. The list excluded U.S. territories and lenders that have already failed. Also left out were the 19 lenders that underwent the Treasury’s stress tests in May; they were deemed “too big to fail” and told by regulators that government capital was available to keep them in business.

Excluding the stress-test list, banks with nonperformers above 5 percent had combined deposits of $193 billion, according to Bloomberg data. That’s almost 15 times the size of the FDIC’s deposit insurance fund at the end of the first quarter.

About 2.6 percent of the $7.74 trillion in bank loans outstanding in the U.S. at the end of March were nonaccruing, the highest in 17 years, according to the most recent data from the FDIC. Nonaccrual loans peaked at 3.27 percent in the second quarter of 1991, during the savings and loan crisis, and averaged 1.54 percent over the past 25 years.

‘Off the Charts’

“These numbers are off the charts,” said Blake Howells, an analyst at Becker Capital Management in Portland, Oregon, referring to the nonperforming loan levels at companies he follows. Banks are losing the “ability to try and earn their way through the cycle,” said Howells, who previously spent 13 years at Minneapolis-based U.S. Bancorp.

Corus, with more than two-thirds of its loans nonperforming, has the highest rate among publicly traded banks. The company said last month that it’s “critically undercapitalized” after five consecutive quarterly losses tied to defaults on condominium construction loans. Randy Curtis, Corus’s interim chief executive officer, didn’t respond to calls for comment.

Marshall & Ilsley, Wisconsin’s biggest bank, reduced its nonperforming loans last month to 5.01 percent from 5.18 percent after selling $297 million in soured loans, mostly residential mortgages in Arizona, the Milwaukee-based company said Aug. 10.

Deadline for Nonperformers

The bank has “been very aggressive in identifying and tackling credit challenges,” Chief Financial Officer Greg Smith said in an Aug. 12 interview. Smith said 26 percent of loans classified as nonperforming are overdue by less than the industry’s typical standard of 90 days. With those excluded, the ratio would be around 3.7 percent, he said.

Synovus, plagued by defaulting construction loans in the Atlanta area, said nonperforming loans rose to 5.4 percent in the second quarter from 5.2 percent the previous period. Disposals of nonperforming assets reached $404 million in the quarter ended in June, the Columbus, Georgia-based company said.

Synovus is selling troubled loans and will continue its “aggressive stance on disposing of nonperforming assets” as long as the level is elevated, spokesman Greg Hudgison said in an e-mailed statement.

Michigan Home

Flagstar is based in Troy, Michigan, the state with the nation’s highest unemployment rate. Flagstar has $16.4 billion in assets and reported last month that 11.2 percent of its loans were nonperforming; about two-thirds were home mortgages. Flagstar CFO Paul Borja didn’t return repeated calls for comment.

The bank’s allowance for loan losses was 5.4 percent of total loans at the end of the second quarter, compared with 3.3 percent at Synovus and 2.8 percent at Marshall & Ilsley, according to company filings. All three reported at least three straight quarterly deficits.

The FDIC doesn’t comment on lenders that are open and operating and doesn’t disclose which banks are on its problem list. The agency will probably impose an emergency fee on the more than 8,200 banks it insures in the fourth quarter to replenish the insurance fund, the second special assessment this year, Chairman Sheila Bair said last week. The FDIC attempts to sell deposits and assets of seized banks to healthier firms to avoid eroding the fund, said agency spokesman David Barr.

Capital Levels

To determine which banks are most troubled, regulators compare the ratio of nonperforming loans to the percentage of equity a firm has relative to its assets, said Barth, the former OTS economist. A company with 5 percent nonperforming loans and equity of 8 percent is better positioned than one with the same amount of troubled loans and equity of 4 percent, he said.

Flagstar’s equity-to-assets ratio in the second quarter was 5.4 percent, Synovus’s was 8.9 percent and Marshall & Ilsley, which raised $552 million through a stock sale in June, was at 11 percent, according to the banks.

The three lenders that failed last week -- Florida’s First State Bank and Community National Bank and Oregon’s Community First Bank -- all had nonperforming loans above 6 percent and equity ratios below 4.5 percent.

“The nonperforming ratio, in and of itself, should be a great concern,” said Barth, a professor of finance at Auburn University in Alabama and senior finance fellow at the Milken Institute in Santa Monica, California. “It becomes even more troublesome when it goes above 3 percent and the equity-to-asset ratio is quite low.”

Toast Time

While 5 percent can be “fatal” for home lenders, commercial real estate lenders may be able to withstand higher rates, said William K. Black, former lawyer at the Federal Home Loan Bank of San Francisco and the OTS. Commercial loans carry higher interest rates because they’re riskier, he said.

“At the 5 percent range, you’re probably hurting,” said Black, an associate professor of economics and law at the University of Missouri-Kansas City. “Once it gets around 10 percent, you’re likely toast.”

To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net

Last Updated: August 14, 2009 00:00 EDT

Last edited by Northern Boy; 08-15-2009 at 02:39 AM.
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Old 08-15-2009, 09:23 PM   #3
alyscat
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Default Re: Colonial Bank Goes Bust

Yeah, colonial "bought out" by BB&T. LOL Another shotgun marriage, probably. See George Ure's http://urbansurvival.com/week.htm
May not be up past today, though.


The webbot predictions are that Aug 22 we're going to start to see issues with the derivatives (for those who know what to look for) - and it was going to start with something on the 16th. Well, yesterday was 2 days early, so that might not be it, but I think we're going to see major problems over the next week or so on the financial arenas. Stay tuned.
Alys
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Old 08-15-2009, 09:24 PM   #4
alyscat
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Default Re: Colonial Bank Goes Bust

The big question is, is FDIC bust?
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Old 08-15-2009, 09:41 PM   #5
Northern Boy
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Default Re: Colonial Bank Goes Bust

there was never anything in it . If the FED is broke you can be Sure the FDIC is As well
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Old 08-18-2009, 02:33 AM   #6
peaceandlove
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Default Re: Colonial Bank Goes Bust

FEVER I AM Commentary on Banks goin' BUST!

Don't Panic! Big Banks are Failing!

Mike at FeverIAm
August 16, 2009

Baltic Dry Index down 25% since July.

Quote:
Separately, the Baltic Dry Index – measuring freight rates for bulk goods – has tipped over, dropping 25pc since late July. The shipping figures buttress reports that China has stopped building up stocks of metals and other commodities after a spate of frantic buying over the early summer.


Colonial Bank Group (publically traded) becomes biggest bank failure of 2009.

See (More Info) at youtube page for links to articles he references.

VIDEO (12:03):

Last edited by peaceandlove; 08-18-2009 at 08:26 PM.
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Old 08-18-2009, 02:36 AM   #7
Wormhole
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Default Re: Colonial Bank Goes Bust

What's interesting is that the Federal Reserve never really had any money in the first place. They just print it, sell it, and collect interest on it.

Peace of Mind,
Wormhole
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Old 08-18-2009, 08:16 PM   #8
orthodoxymoron
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Default Re: Colonial Bank Goes Bust

If you're really interested in the subject of banks going bust...check out this 0% interest thread of mine! http://projectavalon.net/forum/showt...n+mutual+story

Would there be more banks going bust if FDIC actually had some money??? Who's going to seize FDIC??? The Chinese???
Where's the nearest highrise to jump out of???

Last edited by orthodoxymoron; 08-21-2009 at 12:30 PM.
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Old 08-21-2009, 12:28 PM   #9
Steve_A
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Default Re: Colonial Bank Goes Bust

Hi alyscat,

The answer to your questioncould very well be answered on 25th of August, when the FDIC has to publish its' second quarter financial report on US banks.

It is thought by some to be already borrowing money from the FED.

A good article about this can be seen at the following link:

http://www.lewrockwell.com/sardi/sardi116.html

Best regards,

Steve


Quote:
Originally Posted by alyscat View Post
The big question is, is FDIC bust?
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Old 08-25-2009, 04:46 AM   #10
peaceandlove
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Default Re: Colonial Bank Goes Bust

Quote:
Originally Posted by Steve_A View Post
...question could very well be answered on 25th of August, when the FDIC has to publish its' second quarter financial report on US banks. Steve
Blessings Steve,

Here we are already!!!

Today August 25th, hmmmm we shall see.

Newest Fever I Am Commentary:

August 23, 2009

Don't Panic! US Bank sold to Spain?!

VIDEO (12:22):
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Old 08-25-2009, 10:58 PM   #11
Steve_A
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Default Re: Colonial Bank Goes Bust

Hi Peaceandlove,

Following is a list of probable bank faliures for this year (or pretty soon).

http://bankimplode.com/list/troubledbanks.htm

Best regards,

Steve
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Old 08-26-2009, 08:15 PM   #12
peaceandlove
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Default Re: Colonial Bank Goes Bust

Quote:
Originally Posted by Steve_A View Post
Hi Peaceandlove,

Following is a list of probable bank faliures for this year (or pretty soon).

http://bankimplode.com/list/troubledbanks.htm

Best regards,

Steve
Wow Steve,

That website needs a search window to find particular banks by state or by city...

Didn't see mine there, after a long visible search...thank goodness, although I am not keeping more than $200 in the bank at any time.

Unbelievable ,

PaL

Here is a link found on the Market Ticker Forum, you are quoting from, for ratings on banks.

Bank, Thrift and Credit Union Ratings
Updated: July 22, 2009
Search for safe financial institutions: See Link Below

Explanation

Bankrate.com's Safe & Sound® service is a proprietary system designed to provide ratings information on the relative financial strength and stability of U.S. commercial banks, savings institutions and credit unions. The system applies 22 tests to each institution to measure that institution's:

Capital adequacy.
Asset quality.
Profitability.
Liquidity.

Continues: http://www.bankrate.com/rates/safe-s...gs-search.aspx
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Old 08-26-2009, 08:57 PM   #13
lindabaker
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Default Re: Colonial Bank Goes Bust

Thank you, Steve! My Georgia bank was on the list, and now I'm gonna keep less in the checking account, or close it out altogether. Trouble is, the bank across the street and the only other ones in my town, are on the list, too. OMG no where to run no where to hide. Good thing all my money's gone! Ha HA I appreciate the information...it's just confirmation of my intuition seeing the yellow tape around the entrances to the banks every time I drive by...
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Old 08-27-2009, 04:44 PM   #14
Steve_A
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Default Re: Colonial Bank Goes Bust

Hi Everyone,

It seems that the crisis is a little more severe than first thought. The list of probable faliures in banks led to around 245 banks being identified according to the information from the link I posted in a previous message.

The FDIC has a different view. It puts the figure at 416 banks that are under scrutiny - almost double. That must mean surely that the initial 245 banks that were under scrutiny before this latest release of information must be in really dire straits.

Keep your heads up and your money in a safe place, like under your matress!

Check out the story: http://www.reuters.com/article/newsO...57Q34M20090827

Best regards,

Steve
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Old 08-29-2009, 12:21 AM   #15
peaceandlove
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Default Re: Colonial Bank Goes Bust

Quote:
Originally Posted by Steve_A View Post
Hi Everyone,

It seems that the crisis is a little more severe than first thought. The list of probable faliures in banks led to around 245 banks being identified according to the information from the link I posted in a previous message.

The FDIC has a different view. It puts the figure at 416 banks that are under scrutiny - almost double. That must mean surely that the initial 245 banks that were under scrutiny before this latest release of information must be in really dire straits.

Keep your heads up and your money in a safe place, like under your mattress!

Check out the story: http://www.reuters.com/article/newsO...57Q34M20090827

Best regards,

Steve


Blessings Steve,

Here are yet greater and more daunting figures.

1,000 Banks to Fail In Next Two Years: Bank CEO

Published: Thursday, 27 Aug 2009
By: Natalie Erlich

The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May.

“We’ve already lost 81 this year,” Kanas told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They're smaller companies.” (See the accompanying video for the complete interview.)

VIDEO (8:05) and SOURCE: http://www.campaignforliberty.com/wire.php?view=7170

Another safe place to keep cash is in your septic tank in a sealed container suspended near the cover!!!

Last edited by peaceandlove; 08-29-2009 at 12:47 AM.
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Old 08-29-2009, 12:55 AM   #16
peaceandlove
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Default Re: Colonial Bank Goes Bust

Looks like the smaller banks are being gobbled up by the larger banks.

Banks ‘Too Big to Fail’ have grown even bigger

Behemoths of bailout cut consumer choice, tempt corporate moral hazard

Fri., Aug 28, 2009

WASHINGTON - When the credit crisis struck last year, federal regulators pumped tens of billions of dollars into the nation's leading financial institutions because the banks were so big that officials feared their failure would ruin the entire financial system.

Today, the biggest of those banks are even bigger.

The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit.

Continues: http://www.msnbc.msn.com/id/32591904...shington_post/
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Old 08-29-2009, 08:38 AM   #17
Steve_A
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Default Re: Colonial Bank Goes Bust

Hi peaceandlove,

That way you will make a withdrawal only when you really need to!

Best regards,

Steve




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Another safe place to keep cash is in your septic tank in a sealed container suspended near the cover!!!
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