Eight Banks Fail; Canada’s Second Largest Lender Buys Three Of Them
by ilene - April 17th, 2010 1:31 am
Eight Banks Fail; Canada’s Second Largest Lender Buys Three Of Them
Courtesy of Mish
It’s bank failure Friday and today was no disappointment. Today regulators stepped up to the plate with Eight Bank Seizures as the number of failures in 2010 hits 50.
U.S. regulators on Friday seized eight banks with assets totaling more than $6 billion, raising the tally this year to 51 failed banks and adding to the carnage of small institutions that is expected to peak this year.
The eight banks were the most authorities closed since nine were seized last October.
The failed banks were spread across the United States, from Washington state and California to Massachusetts and Florida. Banks have been failing at a consistent pace as the industry still works through large portfolios of troubled mortgages and commercial real estate loans.
The Federal Deposit Insurance Corp said the eight banks that failed were:
- City Bank of Lynnwood, Washington, with assets of about $1.13 billion
- Tamalpais Bank of San Rafael, California, with assets of $628.9 million
- First Federal Bank of North Florida of Palatka, Florida, with assets of $393.9 million
- AmericanFirst Bank, of Clermont, Florida, with assets of $90.5 million
- Riverside National Bank of Florida, with assets of $3.42 billion
- Butler Bank of Lowell, Massachusetts, with assets of $268 million
- Lakeside Community Bank of Sterling Heights, Michigan, with assets of $53 million
- Innovative Bank of Oakland, California, with assets of $284 million.
The recovery of the bank industry is lagging behind the recovery of the overall economy, which is regaining footing after the worst financial crisis since the 1930s.
FDIC Chairman Sheila Bair recently said bank failures will likely peak in the third quarter of this year.
Toronto-Dominion Buys Three Failed Banks
Inquiring minds are reading Toronto-Dominion Buys Three Failed Banks as 2010 Toll Hits 50
Toronto-Dominion Bank, Canada’s second-largest lender, agreed to buy three Florida-based financial institutions as those and five other failures brought the number of 2010 closures to 50.
“These were all in locations that were in our master plan,” for new branches, Toronto-Dominion Chief Executive Officer Edmund Clark said yesterday in a telephone interview. “It would have taken us five years to have built that many branches, so it just speeds up our development.”
Lenders are collapsing amid losses on residential and commercial real estate loans which pushed the FDIC’s list of “problem” banks to the
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Comparing Today’s Bank Crisis to the Past
by ilene - August 25th, 2009 4:00 pm
Comparing Today’s Bank Crisis to the Past
Courtesy of John Lounsbury at Piedmonthudson’s Weblog (posted at Seeking Alpha)
Even when adjusted for inflation and population growth, the 2008-09 banking crisis far exceeds previous banking crises, including even the Great Depression. There were 10,000 bank failures in the Great Depression, but few of them had branches.
Today, a medium sized bank usually has hundreds of branches and the two big failures, Washington Mutual and Wachovia Bank had more than 8,000 branches between them.
Thus, the number of actual bank locations affected in the current crisis, which is not over, is similar to the entire period of the Great Depression from 1929 to 1941.
When it comes to the amount of money involved, the current crisis has 70 times the asset dollars in failed banks compared to the Great Depression. Even when the figures are adjusted for inflation and population growth, the current crisis is still much larger in dollar terms.
An article at TheStreet.com entitled "Banking Crisis Dwarfs the Great Depression" gives the analysis details (here). The conclusion of that article states:
How does this bank crisis compare historically? There is no comparison.
This conclusion can also be seen in the analysis of the magnitude of assets involved in past crises to the GDP values at the time. This is shown in the following table:
The relationship of the current banking crisis to the size of the economy is more than seven times greater than the worst year of the Great Depression (1933). This crisis is 19 times larger with respect to GDP than the next worst year, 1989, in the S&L crisis.
These are astounding relationships. We have been and still are in unchartered territory. The Great Depression may not be repeated, but, in some ways, we have exceeded it to the downside. The ability of the U.S.and the world economy to withstand such a shock amazes me.
Now we have to see how the aftershocks and the financial system structure weakened by the "big one" interact in the coming years. I did not say months; it will take years to repair the effects of an event of this seismic magnitude.
Be prepared for the unexpected. We have never gone this way before.
Read the rest of the analysis in TheStreet.com article…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.