Tag Archives: Bank Failure

The FDIC announced Friday the closure of Montgomery Bank & Trust in Ailey, Georgia, after the disappearance of the bank's director. Aubrey Lee Price, an investment advisor and the director of Montgomery Bank & Trust, was accused by the government of wire fraud related to the embezzlement of $17 million from the bank.

Fewer mortgaged-related businesses had to shut down their doors during the first six months of this year compared to the same time period a year ago in 2011, according to the Mortgage Graveyard report released by Mortgage Daily.

In May, Treasury announced exit strategies to wind down on the remaining investments it still holds from the Troubled Asset Relief Program (TARP). One of those strategies involved a second round of auctions to sell off preferred stocks it holds. On June 25, Treasury began the public offerings and announced Thursday it expects proceeds to be $204 million from the sale of preferred stock in seven financial institutions.

The former president of Orion Bank was sentenced to 6 years in federal prison for conspiring to commit bank fraud and making false statements to bank examiners, U.S. Attorney Robert E. O'Neill announced Tuesday.

In a speech before the Commercial Real Estate (CRE) Finance Council on Wednesday, Comptroller of the Currency Thomas Curry warned banks and thrifts not to keep their eggs in one basket with CRE loans. Following up on his remarks in May about operational risk in banking institutions, Curry stressed that CRE credit is still a significant core risk area for banks and thrifts. Curry pointed out that national banks and federally chartered thrifts hold over $700 billion in total CRE loans, an amount that comprises 14 percent of their aggregate loan portfolios.

The FDIC's Deposit Insurance Fund (DIF) took a combined hit of approximately $80.8 million Friday after the closure of four banks. First Capital Bank in Oklahoma was announced by the FDIC as the first Oklahoma bank and the 25th bank overall to close in 2012. That announcement was followed by three more announcements of the closings of Carolina Federal Savings Bank in South Carolina, Farmers and Traders State Bank in Illinois, and Waccamaw Bank in North Carolina.

The Office of the Comptroller of the Currency closed down Alabama Trust Bank, National Association, of Sycalaugua, Alabama over the weekend, marking the first Alabama bank failure and the 24th national failure this year.

While the pace of bank closings has slowed this year compared to the year before, in its bank failure report, Trepp noted that there are still more than 200 banks at high risk of failure as of the first quarter of 2012. More specifically, 209 banks are considered to be at high risk of failure on the Trepp Watchlist, three of which failed in April, leaving 204. The high-risk banks are more heavily concentrated in Georgia (41 banks), followed by Florida (32), Illinois (24), Minnesota (12), North Carolina (11), Tennessee (9) and Missouri (9).

While Treasury has stated it recovered $264 billion of the $245 billion invested in TARP, Treasury Assistant Secretary Timothy G. Massad said 343 banks still remain in TARP's taxpayer-funded bank programs. Most of these banks are smaller, community lenders and are having a more difficult time with raising funds from private investors in the capital markets to repay taxpayers, Massad explained in a Treasury blog Thursday.

After what seemed to be a slow month for bank closings, with just one closing April 20, the FDIC announced five bank closings Friday, raising the national tally of failed banks to 22 so far this year. Regulators ceased operations for Bank of the Eastern Shore, HarVest Bank of Maryland, Inter Savings Bank, Plantation Federal Bank, and Palm Desert National Bank.