by Calculated Risk on 7/31/2009 11:59:00 PM

by Calculated Risk on 7/31/2009 09:24:00 PM

From the WSJ: Colonial Financing Pact Collapses

Colonial BancGroup Inc.'s second-quarter loss widened on big charges and a key financing deal fell through, pushing the company out of compliance with Alabama capital requirements and causing doubts about the company's ability to remain a going concern.
...
In June, the Colonial Bank unit agreed to oversight by the Federal Deposit Insurance Corp. and Alabama Banking Department and to other steps ... a $26 billion institution.

From the SEC 8-K filed today:

Going Concern Assessment
As a result of the above described regulatory actions and the current uncertainties associated with Colonial’s ability to increase its capital levels to meet regulatory requirements, management has concluded that there is substantial doubt about Colonial’s ability to continue as a going concern. The Company expects to update its 2008 financial statements contained in the Company’s Annual Report on Form 10-K, prior to filing its June 30, 2009 Form 10-Q. The Company is working to implement the Capital Action Plan described above which includes strategies to increase capital or to sell the Company in order to address the uncertainties giving rise to the going concern assessment.

Something for another BFF.

by Calculated Risk on 7/31/2009 08:16:00 PM

Mutual Failure
Our oversight, their ethics
We should demand more
by Soylent Green is People
From the FDIC:

Mutual Bank, Harvey, Illinois, was closed today by the Illinois Department of Financial Professional Regulation - Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of July 16, 2009, Mutual Bank had total assets of $1.6 billion and total deposits of approximately $1.6 billion.
...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $696 million. ... Mutual Bank is the 69th FDIC-insured institution to fail in the nation this year, and the thirteenth in Illinois. The last FDIC-insured institution to be closed in the state was First National Bank of Danville, Danville, on July 2, 2009.

That makes five today ...

by Calculated Risk on 7/31/2009 06:16:00 PM

Bair's Cash for Clunkers
Hasn't run out of money
Four traded so far.
by Soylent Green is People
From the FDIC: Herring Bank, Amarillo, Texas, Assumes All of the Deposits of First State Bank of Altus, Altus, Oklahoma

First State Bank of Altus, Altus, Oklahoma, was closed today by the Oklahoma State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of June 19, 2009, First State Bank of Altus had total assets of $103.4 million and deposits of approximately $98.2 million. In addition assuming all of the deposits of the failed bank, Herring Bank will purchase approximately $64.4 million in assets. The FDIC will retain the remaining assets for later disposition.
...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $25.2 million.... First State Bank of Altus is the 65th FDIC-insured institution to fail in the nation this year, and the first in Oklahoma. The last FDIC-insured institution to be closed in the state was American Bank of Commerce, Oklahoma City, on March 26, 1992.

From the FDIC: Stonegate Bank, Fort Lauderdale, Florida, Assumes All of the Deposits of Integrity Bank, Jupiter, Florida

Integrity Bank, Jupiter, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver....

As of June 5, 2009, Integrity Bank had total assets of $119 million and total deposits of approximately $102 million. ...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $46 million. ... Integrity Bank is the 66th FDIC-insured institution to fail in the nation this year, and the fourth in Florida. The last FDIC-insured institution to be closed in the state was BankUnited, FSB, Coral Gables, on May 21, 2009.

From the FDIC: First Financial Bank, National Association, Hamilton, Ohio, Assumes All of the Deposits of Peoples Community Bank, West Chester, Ohio

Peoples Community Bank, West Chester, Ohio, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of March 31, 2009, Peoples Community Bank had total assets of $705.8 million and total deposits of approximately $598.2 million. ...

The FDIC and First Financial Bank, N.A. entered into a loss-share transaction on approximately $657.6 million of Peoples Community Bank's assets....

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $129.5 million. ... Peoples Community Bank is the 67th FDIC-insured institution to fail in the nation this year, and the first in Ohio. The last FDIC-insured institution to be closed in the state was Miami Valley Bank, Lakeview, October 4, 2007.

From the FDIC: Crown Bank, Brick, New Jersey, Assumes All of The Deposits of First Bankamericano, Elizabeth, New Jersey

First BankAmericano, Elizabeth, New Jersey, was closed today by the New Jersey Department of Banking and Insurance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. ...

As of July 16, 2009, First BankAmericano had total assets of $166 million and total deposits of approximately $157 million. ...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $15 million. ... First BankAmericano is the 68th FDIC-insured institution to fail in the nation this year, and the second in New Jersey. The last FDIC-insured institution to be closed in the state was Citizens Community Bank, Ridgewood, May 1, 2009.

That is four so far ...

by Calculated Risk on 7/31/2009 03:55:00 PM

As we wait for the first bank failure today, let me start with a comment on house prices:

Tech Ticker has a story on house prices today: Housing Bottom? No, the Mother of All Head Fakes. The house price issue is worth some thought this weekend. Although the seasonal adjustment for Case-Shiller appears insufficient, I checked it with some models, and I think it is calculated correctly. I'll post some thoughts on house prices this weekend.

And on vacant CRE, it is hard to beat this, from the WSJ: Giant Warehouses Dot Phoenix Desert Awaiting Imports That Never Came

Along a 15-mile stretch of desert, amid strip malls and unfinished subdivisions, nearly a dozen giant warehouses sit silent and empty. They are relics of this city's dream of becoming a national warehouse hub ...

Today, an empty, half-mile-long warehouse lingers from that vision. The building's 1.2 million square feet could fit 193 full-size copies of the Statue of Liberty. Its parking lot has room for 292 tractor trailers. But on a recent morning the only signs of life were a security guard's trailer, golf cart and bicycle.
...
"It's not a pretty story," says developer Jonathan Tratt ... Mr. Tratt's warehouse is one of 11 storage complexes completed in southwest Phoenix in 2008, with two more set to be finished this year. Those 13 properties combined will have eight million square feet and are now 86% empty ...

And this is a corollary to bank failures, from the Seattle Times: Frontier Financial to be bought by takeover firm (ht Mark)

Frontier Financial and SP Acquisition Holdings announced this morning a deal that will give Frontier shareholders 2.5 million SPAH shares ...

In March, Everett-based Frontier Financial had agreed to submit to tighter supervision by regulators over the way it lends money and manages its operations.

On Wednesday, the company with $4 billion in assets reported a second-quarter loss of $50 million ... Nonperforming assets accounted for 20.5 percent of the company's total assets at the end of June, up from 3 percent a year ago ...

Probably a number of weaker banks will be acquired this year. It is better than being seized by the FDIC.

Click on graph for larger image in new window.

And finally from Doug Short of dshort.com (financial planner): "Four Bad Bears".

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.