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Tag Archives: Bank Failure

NCUA Reaches Settlements with Two Banks

The National Credit Union Association (NCUA) has reached settlements with Citigroup and Deutsche Bank Securities regarding residential mortgage-backed securities sales to five wholesale credit unions that have recently failed. Citigroup agreed to pay $20.5 million, and Deutsche Bank agreed to pay $145 million to help lessen the losses incurred when the five credit unions failed. Neither bank admitted to fault when agreeing to the settlement. Total losses incurred from the five credit union failures stand at $3.3 billion, according to the NCUA.

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Georgia Lender Becomes This Year’s 88th Failed Bank

Community Bank of Rockmart ran its business from a single branch location in Rockmart, Georgia. The bank had $55.9 million in deposits and assets totaling $62.4 million. It became the 88th FDIC-insured institution to fail in the nation this year and the 23rd in Georgia when state regulators shuttered its doors late last week. The FDIC brokered a deal with Century Bank of Georgia to assume all the deposits of the failed bank and purchase $40.7 million of its assets.

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Commercial Real Estate Exposure Pushes 11 More Banks to Insolvency

While the roots of the financial crisis can be found in the nation's residential housing sector, it's now exposure to bad commercial real estate loans that's battering banks' balance sheets. The research firm Trepp LLC has released a new report on recent U.S. bank failures and the drivers behind their demise. In total, 11 banks failed during the month of October, collectively with $617 million in nonperforming loans. Commercial real estate loans made up 65 percent of the nonperforming balance, while residential real estate was 22 percent.

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Regulators Seize Lenders in Nebraska and Utah

State and federal regulators have closed the doors on two more community-based lenders in Nebraska and Utah, bringing this year's tally of failed banks to 87. Mid City Bank, Inc. in Omaha has been acquired by Purdum State Bank, which is now operating under the name Premier Bank. Utah's SunFirst Bank has been largely absorbed by Cache Valley Bank. However, the FDIC says it is retaining $15 million in deposits that may be subject to external litigation involving SunFirst Bank, along with $20.8 million of its assets which Cache Valley Bank elected not to acquire.

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Illinois’ All American Bank Taken Over by International Bank of Chicago

State and federal regulators shuttered All American Bank in Des Plaines, Illinois, over the weekend, bringing this year's failed-bank tally to 85. The FDIC brokered a deal with International Bank of Chicago to take over the failed lender's operations and purchase all of its assets. All American Bank is the ninth FDIC-insured institution in the state to go under this year.

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Regulators Shutter Four More Community-Based Lenders

Four more community-based lenders have been seized by regulators. That brings this year's tally of failed institutions to 84. But the number of fallen banks in the U.S. continues to lag behind the 139 closures recorded at this time during 2010. Officials with the FDIC say bank failures have peaked and are expected to continue to decline as the financial sector returns to health. This latest round of closings claimed two lenders in Georgia and one each in Colorado and Florida.

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Regulators Seize Four Community-Based Lending Institutions

This year's failed-bank tally has risen to 80 with the closings of four more lenders over the weekend. Piedmont Community Bank in Georgia was picked up by State Bank and Trust Company. Country Bank in Illinois has been taken over by Blackhawk Bank & Trust. In Cranford, New Jersey, First State Bank has now become part of New York's Northfield Bank. Blue Ridge Savings Bank in North Carolina was absorbed by the Bank of North Carolina.

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Execs of TARP-Supported Bank Charged with Hiding Millions in Losses

A federal grand jury in San Francisco has indicted two former bank executives of the now-defunct United Commercial Bank for using fraudulent accounting maneuvers to misrepresent loan losses to federal agencies as the bank took money from taxpayers through the Troubled Asset Relief Program (TARP). The Securities and Exchange Commission has filed separate civil charges accusing the same two executives and the former CEO of misleading investors about the bank's mounting loan losses, to the tune of $65 million.

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FDIC Sues Former Georgia Bank Executives

The FDIC has launched a suit against 11 executives of former Georgia-based Alpha Bank & Trust hoping to recover $23.92 million in damages as a result of the bank's ""failure to use ordinary care and gross negligence."" The Georgia Department of Banking and Finance closed Alpha Bank & Trust in October 2008 after less than 30 months of operation, making it the fastest-failing bank between 1992 and 2008. The filing specifically targets 13 commercial loans, which the FDIC says borrowers had no ability to repay.

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Regulators Close Lending Institutions in Missouri and Minnesota

Banking regulators in the states of Minnesota and Missouri stepped in over the weekend to shut down community-based lenders in each of their respective states. These latest two closings bring the number of insured institutions on the FDIC's failed-bank list to 76 for the 2011 calendar year. The RiverBank in Wyoming, Minnesota, had been in operation for more than a century but the latest real estate downturn proved to be too much for the local community fixture. Security Bank in Ellington, Missouri, was also closed.

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