Tag Archives: Bank Failure

Federal Reserve Gov. Elizabeth Duke offered to reassure bank executives Friday that the central bank wants to avoid a one-size-fits-all approach to regulation and work with smaller financial institutions to ensure that new mortgage banking rules work effectively. Speaking before the California Bankers Association in Santa Barbara, the official, a former banker-turned-regulator, said that the Fed will strive to prepare examiners and work with banks ahead of stress tests and final rules. She said regulators will include statements before every rule for bankers.

The New Year began without any bank failures, but one new law will task the FDIC inspector general with checking the books to see if the agency helped exacerbate failures in 2011. The House voted Tuesday to pass a bill amended by the Senate and reconciled by both chambers in December that will compel investigations by the FDIC and Government Accountability Office. Once it becomes law, the bill will call for studies into whether the FDIC├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós loss-share agreements helped accelerate bank failures last year.

Two banks went under over the weekend, interrupting a failure-free last two weeks and raising the national tally to 92 for the year ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a number in line with earlier forecasts from the FDIC as the New Year approaches. Phoenix, Arizona-based Western National Bank and Panama City, Florida-based Premier Community Bank each shuttered their doors, with regulators appointing the FDIC to serve in its traditional role of receiver. Both bank failures cost the FDIC's insurance fund a combined $68.8 million.

A bold move to shore up global financial liquidity by the Federal Reserve and central banks from five other countries created a surge in confidence for investors Wednesday, inspiring a pickup in stocks and shares for the nation├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós four biggest U.S. lenders. The Dow Jones Industrial Average jumped nearly 500 points to crest at 12,045.68 by end of day in response, with shares climbing for Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Central banks agreed to lower prices for U.S. dollar liquidity swaps by 50 basis points.

Under a final rule, banks with $50 billion or more in assets will need to submit capital plans to the Federal Reserve, which will also begin performing stress tests for the largest financial institutions next year. In accordance with the rule, the Fed will take responsibility for annual evaluations of each institution├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós capital adequacy, internal assessment processes, and capital distribution plans, including dividend payments and stock repurchases.

Balance sheets improved steadily for commercial and savings financial institutions over the third quarter, according to the FDIC, with those insured by the federal agency offering $35.3 billion in profit margins. Loan portfolios snagged an updraft over the third quarter, posting an increase for the second consecutive quarter as loans and leases went up by $21.8 billion. Residential mortgage loan balances climbed by $23.7 billion. Notably, the FDIC's "Problems List" contracted for the second consecutive quarter.

Defying forecasts for a slowdown, the national tally for bank failures this year hit 90 as two financial institutions went under in Iowa and Louisiana. State regulators shuttered Johnston, Iowa-based Polk County Bank and Lacombe, Louisiana-based Central Progressive Bank, appointing the FDIC receiver. Grinnell-based Grinnell State Bank and New Orleans-based First NBC Bank scooped up branches, assets, and deposits in purchase-and-assumption agreements. Century-old Polk County closed its doors.

The 2011 national tally for bank failures crested at 88 with the closure of a financial institution in Georgia Thursday. The Community Bank of Rockmart added to the state's litany of bank failures by shuttering with $62.4 million in total assets and $55.9 million in total deposits. State regulators closed the bank and appointed the FDIC as receiver. The FDIC swooped in to cover the $14.5 million-bill left behind by the bank failure. The failure in Rockmart boosts both the national and state tallies, with the latter climbing to 23, keeping Georgia the leader in 2011 closures.

A third-quarter opinion survey for loan officers revealed that more financial institutions tightened their credit supply over fears that debt-ridden euro zone countries would tear apart the content├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós currency and expose U.S. banks to danger. The Federal Reserve polled senior loan officers from 51 U.S. banks and 22 branches for the nation├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós financial institutions at foreign branches for the October 2011 Senior Loan Officer Opinion Survey on Bank Lending Practices.

Political trouble in Greece sent stocks and shares for major mortgage lenders tumbling Friday, even as the world's 20 wealthiest nations placed eight U.S. banks on a list that may require systemically risky institutions to shore up their capital reserves. The decision revealed the degree to which events overseas continue to shake U.S. mortgage lenders in an increasingly interdependent global economy, where international players fear the potential for a double-dip recession and ripple effects from systemically risky institutions.