by Calculated Risk on 2/13/2009 07:16:00 PM

From the FDIC: The Carlinville National Bank, Carlinville, Illinois, Assumes All of the Deposits of Corn Belt Bank and Trust Company, Pittsfield, Illinois

Corn Belt Bank and Trust Company, Pittsfield, Illinois, was closed today by the Division of Banking, Illinois Department of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The Carlinville National Bank, Carlinville, Illinois, to assume all of the deposits of Corn Belt Bank and Trust Company.
...
As of December 31, 2008, Corn Belt Bank and Trust Company had total assets of approximately $271.8 million and total deposits of $234.4 million. The Carlinville National Bank will pay the FDIC a premium of 1.75 percent.
...
The FDIC estimates that the cost to the Deposit Insurance Fund will be $100 million. The Carlinville National Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Corn Belt Bank and Trust Company is the twelfth bank to fail in the nation this year. The last bank to fail in Illinois was National Bank of Commerce, Berkeley, on January 16, 2009.

Three down today ... more to come (probably).

by Calculated Risk on 2/13/2009 06:31:00 PM

From the FDIC: TIB Bank, Naples, Florida, Assumes All of the Deposits of Riverside Bank of the Gulf Coast, Cape Coral, Florida

Riverside Bank of the Gulf Coast, Cape Coral, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with TIB Bank, Naples, Florida, to assume all of the deposits of Riverside Bank.
...
The FDIC estimates that the cost to the Deposit Insurance Fund will be $201.5 million. TIB Bank's acquisition of all of the deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Riverside Bank is the eleventh bank to fail in the nation this year. The last bank to fail in Florida was Ocala National Bank on January 30, 2009.

That makes 2 today.

by Calculated Risk on 2/13/2009 05:44:00 PM

From the FDIC: Heritage Bank, Wood River, Nebraska, Assumes All the Deposits of Sherman County Bank, Loup City, Nebraska

Sherman County Bank, Loup City, Nebraska, was closed today by the Nebraska Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Heritage Bank, Wood River, Nebraska, to assume all of the deposits of Sherman County Bank.
...
As of February 12, 2009, Sherman County Bank had total assets of approximately $129.8 million and total deposits of $85.1 million. Heritage Bank will pay the FDIC a premium of six percent. In addition to assuming all of the deposits of Sherman County Bank, Heritage Bank agreed to purchase approximately $21.8 million in assets, comprised mainly of cash, cash equivalents and marketable securities. The FDIC will retain the remaining assets for later disposition.
...
The FDIC estimates that the cost to the Deposit Insurance Fund will be $28.0 million. Heritage Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Sherman County Bank is the tenth bank to fail in the nation this year. The last institution to fail in Nebraska was Equitable Savings and Loan, Columbus, on February 16, 1990.

It is Friday!

by Calculated Risk on 2/13/2009 05:18:00 PM

From Freddie Mac: FREDDIE MAC EXTENDS MORATORIUM ON FORECLOSURE SALES

Freddie Mac (NYSE: FRE) today announced it is immediately suspending all foreclosure sales involving occupied single family and 2-4 unit properties with Freddie Mac-owned mortgages through March 6, 2009. The suspension does not apply to vacant properties.

The extension will provide servicers with more time to help troubled borrowers find an alternative to foreclosure.

Freddie Mac gives lenders servicing its mortgages broad authority to provide forbearance to borrowers facing financial difficulties, and permanent rate reductions, mortgage term extensions, forbearance of principal or other modifications to borrowers who are already delinquent.

From Fannie Mae: Fannie Mae Suspends Foreclosure Sales Pending Administration Announcement

Fannie Mae (FNM/NYSE) today announced it is suspending all foreclosure sales and evictions of occupied properties through March 6 in anticipation of the Administration's national foreclosure prevention and loan modification program.

The company had previously put in place a suspension of foreclosure sales through January and had previously suspended all evictions through the end of February. In addition, the company adopted a national Real Estate Owned (REO) Rental Policy that allows renters in Fannie Mae-owned foreclosed properties to remain in their homes or receive transitional financial assistance should they choose to seek new housing.

by Calculated Risk on 2/13/2009 04:16:00 PM

Note: RevPAR is revenue per available room.

From Bloomberg: Wyndham Plunges After Announcing New Stock Sale, Quarterly Loss

Revpar, a measure of hotel room rates and occupancy, will drop 6 percent to 10 percent this year, more than 3 percent to 6 percent decline Wyndham forecast in December, [Chief Executive Officer Stephen] Holmes said. The company franchises Super 8, Travelodge and Days Inn hotels.
...
“People trade down to a value purchase as times get tougher,” said Holmes, 52. “Hotel owners need our brands during difficult times even more than they do during good times.”

Hotel revenue fell 3 percent to $170 million in the fourth quarter as Revpar tumbled 9.2 percent. Excluding currency changes, Revpar declined 9.3 percent in the U.S. and 1.6 percent internationally.

“We do not have a heavy concentration of luxury or upper- scale properties in large urban markets where you’re seeing a lot of the more dramatic, double-digit declines in Revpar,” Holmes said.

Look at these key points:

Their forecast changed significantly. In December they were forecasting RevPAR to decline 3% to 6% in 2009 - now they are expecting a 6% to 10% decline.

RevPAR fell off a cliff in December (9.2% decline).

Wyndham offers an inferior good and they believe they are outperforming other hotels.

Back in November PricewaterhouseCoopers forecast a significant decline in RevPAR in 2009 (see: Forecast: 2009 Hotel Occupancy Rate to be Lowest Since 1971) and based on the Wyndman numbers that was probably too optimistic.

by Calculated Risk on 2/13/2009 01:14:00 PM

"We believe three weeks is adequate time for the Treasury to announce – and for us to implement – a new plan."
Jamie Dimon, CEO JPMorgan in letter to Congress

From CNBC: Three Big Banks Are Halting Foreclosures for Now

Citigroup, JPMorgan Chase and Morgan Stanley said they had placed a moratorium on foreclosing on some home loans to give the government time to launch a $50 billion mortgage relief program.
...
The Obama plan under consideration would seek to help homeowners before they fall into arrears on their loans. ... Under the evolving plan, homes would undergo a standardized reappraisal and homeowners would face a uniform eligibility test ...

Another "evolving plan". I think they will discover that there is no easy method for successful loan modifications (as FDIC Chairwoman Sheila Bair discovered when they took over IndyMac). I guess the plan is to buy down loans with the $50 billion - or pay a portion of the monthly payment.

The details will be interesting. I'm curious - how do you measure success when the borrowers aren't already in default?

by Calculated Risk on 2/13/2009 12:52:00 PM

"This ... will be the first quarter ever of negative earnings"
Howard Silverblatt, senior index analyst, at Standard & Poor's.

From MarketWatch: S&P heads to first quarter ever of negative earnings

[N]early 400 of the S&P's 500 companies have weighed in and reported a collective loss -- even excluding financials.
...
A sixth quarter of negative growth ties the prior record set when Harry Truman was president, and ran from the first quarter of 1951 to the second quarter of 1952.

"And next quarter we're expected a new record of seven quarters of negative growth," Silverblatt said.

As of the close of business Thursday, Silverblatt calculates S&P earnings-per-share, on a reported basis, at a loss of $10.44 for the quarter. If financials were taken out of the equation, that EPS deficit would drop to $2.35.

What is the P/E for that?

by Calculated Risk on 2/13/2009 11:13:00 AM

From The Times: Lloyds dives on HBOS £10bn black hole

Lloyds Banking Group shares plunged 40 per cent this afternoon after it revealed a £10 billion black hole at HBOS, the struggling bank that it rescued last year.

Lloyds Banking Group ... [made] a surprise announcement ... that trading at HBOS had worsened in December, driving its losses up by a further £1.6 billion to £10 billion.
...
"It is no secret that the UK economy continued to decline in December, and this was reflected in today's numbers.” [Lloyds said in a statement]
...
Lloyds Banking Group said that the huge losses at HBOS owe to a £4 billion "impact of market dislocation" and about £7 billion of impairments in the HBOS corporate division.

A billion pounds here, a billion pounds there ...

by Calculated Risk on 2/13/2009 08:53:00 AM

From Jerry Hirsch at the LA Times: Cost-conscious customers wreaking havoc on ailing restaurants

From the corner diner to elegant Westside eateries, restaurants in Southern California are shrinking portions, slashing wine prices, cutting employee hours and reducing staff. Some chain restaurants and fast-food purveyors are shutting unprofitable branches, and experts say some may not survive.

Many large dinner-house chains are reporting some of the largest drops in same-store sales -- an important measure of a retailer's financial health -- in recent history.

After the stock market closed Thursday, Southern California chains Cheesecake Factory Inc. and California Pizza Kitchen Inc. both reported plunging same-store sales and profits.

"It is a very tough environment out there," said Richard Rosenfield, co-chief executive of CPK
...
Cheesecake Factory said ... Same-store sales decreased 7.1% ... CPK said ... Same-store sales slid 7.2%.

Dining out is a discretionary expense, and it no suprise that many restaurants are getting hit hard. We can see this in the Restaurant Performance Index from the National Restaurant Association (NRA). Low end chains however might do OK as consumers move to inferior goods; McDonald's same-store sales rose 7.1% in January!

The WSJ has an article too: Consumers Cut Food Spending Sharply

Consumers have cut back sharply on food spending, shunning restaurants, opting for generic products over brand names, trading in lattes for home-brewed coffee and shopping for bargains. That is hurting sales and profits at many food processors, grocery chains and restaurants.
...
In 2008's fourth quarter, consumer spending on food fell at an inflation-adjusted 3.7% from the third quarter, according to data from the Commerce Department's Bureau of Economic Analysis. That is the steepest decline in the 62 years the government has compiled the figure.

More cliff diving.

by Calculated Risk on 2/13/2009 01:30:00 AM

Part I: (hat tip Firedoglake)

Part II: Rogoff starts off Part II with some pretty harsh comments: