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EJ
02-02-07, 11:08 PM
http://www.itulip.com/images/bank.jpgFDIC Approves the Assumption of the Insured Deposits of Metropolitan Savings Bank, Pittsburgh, Pennsylvania (http://www.fdic.gov/news/news/press/2007/pr07009.html)
February 2, 2007 (FDIC)

The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today approved the assumption of the insured deposits of Metropolitan Savings Bank, Pittsburgh, Pennsylvania, by Allegheny Valley Bank of Pittsburgh, Pittsburgh, Pennsylvania.

Metropolitan Savings, with total assets of approximately $15.8 million at the end of the third quarter 2006, was closed today by the Pennsylvania Department of Banking, and the FDIC was named receiver.

Allegheny Valley has agreed to assume approximately $12.0 million of insured deposits of the failed bank. At the time of closure, Metropolitan Savings had approximately $1.2 million in deposits in 70 accounts that potentially exceed the federal deposit insurance limit.

AntiSpin: Just a short Daily News today to report the first, and probably not the last, bank failure in several years. The FDIC tends to announce bank failures on a Friday evening when no one's paying attention.

Metropolitan Savings Bank, Pittsburgh is the smallest bank in Pittsburgh (http://www.citytowninfo.com/places/pennsylvania/pittsburgh/mortgage), with a mere $14 million in assets. That's considerably less than the average $25 million bonus each member of the top brass at Goldman got last year. By failing, Metropolitan becomes the first out of the gate, since June 2004, beating Coast Bank which has been on the watch list. Today the story (http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070202/BUSINESS/702020516) is that Coast is, "...unlikely to fail, but with the potential for an FDIC-induced discount-price sale, it could become the first banking casualty of the housing bubble, says a well known Miami banking analyst." With assets of $51 million, Coast is still a small fry. The big fireworks are still years off.

2002 was the last big year for bank failures, with 12 banks turning turtle (http://www.fdic.gov/bank/individual/failed/banklist.html) as the post-stock market bubble economy bottomed out. My guess is that for years after 2010 when the housing bubble bust may finally bottom (http://www.itulip.com/housingbubblecorrection.htm) we'll see a bumper crop of housing bubble collapse related bank failures. How big a year? Bigger than the early 1990s.

February 27, 1991, Dave Skidmore, Associated Press, reported in the Philadelphia Inquirer FDIC'S OPTIMISTIC VIEW: 180 BANK FAILURES THIS YEAR (http://nl.newsbank.com/nojavascript.html):

Months after the recession is over and the economy is growing again, the government will be struggling with a legacy of failed banks. Bank failures are, in the vernacular of economists, a lagging indicator. They follow, rather than lead, declines in the economy. That's significant in light of the more than 1,000 bank failures in the last six years. Those banks folded not in hard times, but in the midst of the national economy's longest peacetime expansion.
More than one thousand bank failures in six years. How soon we forget.

grapejelly
02-03-07, 09:42 AM
In 1993-1995, Wells Fargo and Bank of America had huge exposures to bad real estate loans in California and Texas.

They began intensive triage, pre-emptively offering borrowers "short pays" where the house is sold and the bank accepts the proceeds as payment-in-full even when the proceeds are less than the principal owing on the mortgage.


This is happening quietly today, I am told. However, last time around, Wells and BofA didn't have a nationwide problem to deal with. Even then, they had big issues handling the scale of write-downs. Now, it is going to be quite ugly.

I would look to these workouts and shortpays on a massive scale.

I wouldn't be surprised to find quiet programs for injecting cash into troubled banks for workout purposes before they actually go belly up or even appear on the watch lists.

DanielLCharts
02-04-07, 11:17 AM
In 1993-1995, Wells Fargo and Bank of America had huge exposures to bad real estate loans in California and Texas.

They began intensive triage, pre-emptively offering borrowers "short pays" where the house is sold and the bank accepts the proceeds as payment-in-full even when the proceeds are less than the principal owing on the mortgage.


This is happening quietly today, I am told. However, last time around, Wells and BofA didn't have a nationwide problem to deal with. Even then, they had big issues handling the scale of write-downs. Now, it is going to be quite ugly.

I would look to these workouts and shortpays on a massive scale.

I wouldn't be surprised to find quiet programs for injecting cash into troubled banks for workout purposes before they actually go belly up or even appear on the watch lists.

grape jelly, you might be right, but can you give us some facts instead of heresay and conjecture? "This is happening quietly today, I am told," doesn't really cut it.

metalman
02-04-07, 03:55 PM
that all depends on who "grapejelly" is...