Comments for Bank Failure #18: FDIC Closes FirstCity Bank, Stockbridge, Georgia

CRbot says:

This comment thread has been HALO-IZED by CRbot.

http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/4353897676868794822

CRbot Fri Mar 20 17:29:35 2009 CDT #
Anonymous says:

Yea....I love bank failure Friday...go Georgia

Anonymous Fri Mar 20 17:31:02 2009 CDT #
Comrade Bear (tj and the bear) says:

BFF! YES!!! Now we KNOW it's Friday!

Comrade Bear (tj and the bear) Fri Mar 20 17:31:05 2009 CDT #
reptillian says:

Friday wasn't cancelled this week!

reptillian Fri Mar 20 17:31:32 2009 CDT #
Counterpointer says:

Chickenfeed. C'mon, we want billions at stake.

C


Counterpointer Fri Mar 20 17:31:33 2009 CDT #
Guest says:

Nobody took over the deposits? How interesting.


Guest Fri Mar 20 17:33:11 2009 CDT #
Comrade Bear (tj and the bear) says:

Thread music...

http://www.youtube.com/watch?v=Thls_tMuFkc&feature=PlayList&p=D508597703199F23&playnext=1&playnext_from=PL&index=7

Comrade Bear (tj and the bear) Fri Mar 20 17:33:12 2009 CDT #
Comrade Dazed and Amused says:

C'mon. This one was just practice for some new hires.

Comrade Dazed and Amused Fri Mar 20 17:34:35 2009 CDT #
EvilHenryPaulson says:

ok, initial estimates:
$297mn in assets
$278mn in deposits below $250k
$778,000 in deposits above $250k wiped out
$100mn cost to the FDIC
Now SunTrust will be paying the FDIC in some way to win the deposits of FirstCity, although the press release didn't give details

What would make up $100mn of liabilities? Brokered or certified deposits? 1/4 of the bank's size?

Is it the FDIC calling them $297mn of assets, but estimating they can only sell them for $197mn?

Can anyone help me understand?

EvilHenryPaulson Fri Mar 20 17:34:49 2009 CDT #
reptillian says:

EHP: my understanding is that brokered deposits are safe.

reptillian Fri Mar 20 17:37:31 2009 CDT #
EvilHenryPaulson says:

reptilian,
brokered deposits are safe, but they do not get listed in the press release because they go back from whence they came. Same with CDs (unless the acquiring bank offers to continue paying the ridiculous high interest rates insolvent banks have to)

I'm trying to reconcile what balance sheet line item would be -$100mn when the reported net assets in the press release are +$19mn

Parent Post

EvilHenryPaulson Fri Mar 20 17:48:09 2009 CDT #
Rob Dawg says:

Knurd up me hearties yo ho but save some grog fer later. Ye nev'r know which way the wind be blowin'.

Rob Dawg Fri Mar 20 17:38:57 2009 CDT #
Counterpointer says:

Take the training wheels off, Sheila. What's next?

C


Counterpointer Fri Mar 20 17:39:02 2009 CDT #
Guest says:

geez, EHP didn't understand either I don't feel quite so dumb now!

Guest Fri Mar 20 17:39:57 2009 CDT #
Anonymous says:

I AM OUTRAGED!!!!!

The commie atheists who brought all this about understand the principle that “divided we fall.” These clever fellows are buying all the gold and scrap gold that people rush to sell them. When our money is no longer worth the paper it is written on, guess who will be sitting in the cat bird seat? They will then head for the hills or the islands. I am just full of cliches today.

Ninety-five percent of the G.I.s of Word War II were Christians. I am a veteran. We fought for capitalism. Those among us who are taking away our rights never put the uniform on or had a nickel in the deal.

I often wonder where we would be if my generation had said, “Hell no, we won’t go.”

Ronnie Hulick

Fort Pierce

http://www.tcpalm.com/news/2009/mar/20/letter-mission-dumb-down-nation-accomplished/

Anonymous Fri Mar 20 17:41:38 2009 CDT #
NC Jim says:

Ronnie,

You are joking around - Right?

Jim

Parent Post

NC Jim Fri Mar 20 18:13:51 2009 CDT #
sm_landlord says:

Seriously, what is it about Georgia? It's not they had a monopoly on stupid banks.

sm_landlord Fri Mar 20 17:43:34 2009 CDT #
Slid says:

Seriously, what is it about Georgia? It's not they had a monopoly on stupid banks.

Texas bankers had all the silly knocked out of them from 1986-1992.

Parent Post

Slid Fri Mar 20 17:48:32 2009 CDT #
Money Man says:

Not a monopoly...just a majority!

Parent Post

Money Man Fri Mar 20 17:48:46 2009 CDT #
Rajesh says:

We have the market cornered on stupid, non-regulating regulators. They handled out banking licenses to every home builder who could get two buddies to pretend to be a board of directors.

Parent Post

Rajesh Fri Mar 20 18:00:41 2009 CDT #
Anonymous says:

What about Corus bank? when are they going to fall?

Anonymous Fri Mar 20 17:46:11 2009 CDT #
scone says:

Make that an extra large half and half, veggie and meat, thin crust, extra cheese.

scone Fri Mar 20 17:47:04 2009 CDT #
Basel Too says:

Is it the FDIC calling them $297mn of assets, but estimating they can only sell them for $197mn?

Yes. About 12% of their assets is actually REO.

Basel Too Fri Mar 20 17:47:18 2009 CDT #
EvilHenryPaulson says:

thanks Basel Too, but I mean it's $100mn
That would be 33.6% of assets on the books being zeroed. Still too high, no?

I guess we can call the phantom line item unfunded loan loss reserves to hedge impaired gains in capital adequacy structure

and I forget, I think I asked FFDIC once, but FDIC administration costs do not get included "in the cost to the FDIC" statement

Parent Post

EvilHenryPaulson Fri Mar 20 17:53:36 2009 CDT #
Comrade Dazed and Amused says:

Stockbridge’s FirstCity Bank deals with enforcement action
By Paul Donsky

The Atlanta Journal-Constitution

Tuesday, February 10, 2009

A community bank in Stockbridge has been hit with an enforcement action, regulators said Monday.

FirstCity Bank is prohibited from a range of activities without approval of state and federal regulators, including paying dividends, issuing debt and purchasing or redeeming shares of its stock. The bank must also issue quarterly progress reports to regulators.

The agreement, signed on Jan. 22, was made public Monday. The announcement came just days after regulators shut down a Henry County bank, FirstBank Financial Services of McDonough.

FirstCity, founded in 1905, is a relatively small bank, with $331.5 million in assets. The bank has three branches in Stockbridge, McDonough and Gibson.

The bank made a recent list of troubled institutions using a measure called the “Texas ratio,” which attempts to gauge a bank’s health by comparing the size of its problem loans and similar assets to the amount of capital and reserves it has set aside to cover potential losses on those loans.

A score above 100 is considered problematic. FirstCity had a score of 241 as of the fourth quarter, the sixth-highest score in the state.

The bank’s loan portfolio is heavily concentrated in the real estate market, which has imploded in recent months and continues to deteriorate. In June, the bank reported $22 million in loans at least 90 days past due.

Bank officials did not return a phone call seeking comment


Comrade Dazed and Amused Fri Mar 20 17:47:39 2009 CDT #
Counterpointer says:

sm_landlord - not a monopoly, but a remarkable concentration over the last couple of months.

Why does Sheila hate the south so?

C


Counterpointer Fri Mar 20 17:48:44 2009 CDT #
Barley says:

I too am going to ask...What is it about Georgia? Better auditors?

Barley Fri Mar 20 17:49:42 2009 CDT #
graingod says:

Barley Georgia has a unique set of state banking laws which has led to problems in GA. specific, so I am told , no bank expert here

Parent Post

graingod Fri Mar 20 18:24:13 2009 CDT #
reptillian says:

When Bernanke recently testified and was asked about taking down
TBTF institutions, he challenged Congress to provide legislation
that would enable the government to do that. I read today that
such legislation is being "fast-tracked" and may be ready in April. Obama is behind it, too. Sorry, no link.

reptillian Fri Mar 20 17:50:01 2009 CDT #
Barley says:

"We fought for capitalism"

So did GWB!

btw if you are vet, thanks for everything! Something we dont say enough of.

Barley Fri Mar 20 17:51:24 2009 CDT #
Rob Dawg says:

I think the FDIC has got to institute right of first refusal. When they take over and dispose of assets anyone in good standing on their mortgage is given the opportunity to take their own note on the same terms as the proposed new entity. Double honesty injection. No more low ball takeovers for fear of losing the best assets to a matching bid and incentive for borrowers to stay current so they qualify for the deal.

Rob Dawg Fri Mar 20 17:51:59 2009 CDT #
Barley says:

Slid - maybe TX banks got shut dwn and the bankers moved to Georgia?

Barley Fri Mar 20 17:52:49 2009 CDT #
scone says:

Yo, EHP! This is OT, but I know you like numbers and chart porn, so here's a comparison of taxes in various countries, done by the Aussies a couple of years ago.

http://comparativetaxation.treasury.gov.au/content/report/html/02_Executive_Summary.asp

scone Fri Mar 20 17:54:29 2009 CDT #
EvilHenryPaulson says:

scone, cool. you planning to run away to join the circus?

Parent Post

EvilHenryPaulson Fri Mar 20 17:58:59 2009 CDT #
Mr. Sparkle says:

And with this failure, the cumulative damage to the FDIC has now broken the $2B mark for 2009. The average loss on assets thus far this year has been 31.75%. Way to be a little above average FirstCity!

Mr. Sparkle Fri Mar 20 17:55:32 2009 CDT #
Anonymoustoo says:

In Georgia if you are politically well connected you can get a bank charter. It wasn't that long ago where it was a ticket to prestige and wealth. Georgia has a lot of troubled banks for a reason. Lots of Counties,(thereby lots of state senators) lots of politically connected "Southern Gentleman". Being smart isn't one of them.

Anonymoustoo Fri Mar 20 17:55:51 2009 CDT #
Sporkfed says:

Sheila's just following Sherman's lead.

Sporkfed Fri Mar 20 18:00:36 2009 CDT #
Counterpointer says:

EHP - since Australia is largely a circus based on a strip-mine parking lot, I think the answer would have to be: yes.

C


Counterpointer Fri Mar 20 18:02:23 2009 CDT #
George says:

Had two accounts at FirstCity, one in my name one in my wife's, both with balances under 250,000. Called FDIC and checks will be mailed out monday.Nice people all looking for work now.

George Fri Mar 20 18:02:46 2009 CDT #
Professor Shays says:

Based upon the list of troubled banks put out by msn.com this week at http://www.msnbc.msn.com/id/29619237/ looks like the rest of the year is going to be full of Friday announcements.



Professor Shays Fri Mar 20 18:05:46 2009 CDT #
Basel Too says:

as receiver, FDIC gets paid first for its administrative costs. also, secured creditors are paid based on the availability of the collateral.

Basel Too Fri Mar 20 18:06:04 2009 CDT #
ShortCourage says:

The WSJ website's Main Page has the following headline in a "Breaking News" banner:

"Regulators seized control of two of the largest corporate credit unions: U.S. Central and WesCorp credit"

ShortCourage Fri Mar 20 18:09:40 2009 CDT #
bANK fAILURE says:

oMfg----dRINK tO cASCADING fAILURES!!!

bANK fAILURE Fri Mar 20 18:10:43 2009 CDT #
Counterpointer says:

EHP - maybe the numbers are arbitrary. If os, you'll just get frustrated trying to make rational sense of them. So, maybe, give it away?

C



Counterpointer Fri Mar 20 18:11:49 2009 CDT #
ShortCourage says:

Banner headline on CNBC.com:

US Central, WesCorp Credit Unions Placed Into Conservatorship; Two Firms Have Combined $57 Billion in Assets: WSJ (Story Developing)

ShortCourage Fri Mar 20 18:11:53 2009 CDT #
Rob Dawg says:

NCUA news releases:
http://www.ncua.gov/indexnews.html

March 20, 2009

Media Release – NCUA Conserves U.S. Central and Western Corporate Credit Unions

The link is not yet active for details.

Rob Dawg Fri Mar 20 18:12:27 2009 CDT #
Counterpointer says:

Oh fk, CUs going down too? Hell.

Mommy!

C


Counterpointer Fri Mar 20 18:13:56 2009 CDT #
CRbot says:

New Thread: Regulators Seize Two Large Credit Unions: U.S. Central and WesCorp
http://www.calculatedriskblog.com/2009/03/regulators-seize-two-large-credit.html ( 1 comments )

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It won't be a ... stylish marriage.
I can't... AFFORD... ANYTHING TO EAT... MUCH LESS A FRACKIN CARRIAGE!!!
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CRbot Fri Mar 20 18:14:05 2009 CDT #
Rob Dawg says:


U.S. Central has approximately $34 billion in assets and 26 retail corporate credit union members. WesCorp has $23 billion in assets and approximately 1,100 retail credit union members.
Link is active now:
http://www.ncua.gov/news/press_releases/2009/MR09-0320.htm


Rob Dawg Fri Mar 20 18:15:25 2009 CDT #
scone says:

scone, cool. you planning to run away to join the circus?
.
No, the DH is an Aussie. We're planning to get the hell out of the USA when he turns 59 1/2 in 2 years, suck out the retirement accounts. I'll become an Aussie citizen, we retire to the beach. We're already getting it together to move our extra savings out of the country.

scone Fri Mar 20 18:16:05 2009 CDT #
Comrade De Chaos says:

I don't think french had better equipped tanks & more planes at the beginning of WW2. It would contradict their doctrine of building huge defensive wall filled with sitting ducks and huge number of artillery pieces. They failed to realize that next war will be much more mobile then WW1. Their most mobile units were located outside the France , monitoring its colonies mostly in Africa.
Russians on the other hand did have more of everything, they also cooperated with germans to the degree that they have provided technical info on their equipment and let germans sharpen their mobility in the Russian "steps."


Comrade De Chaos Fri Mar 20 18:17:26 2009 CDT #
EvilHenryPaulson says:

Basel Too, good to know. I assumed admin expenses were just drawn from the general insurance premium fund.

scone, That is 2003 data and the 2007 set is @ http://www.oecd.org/document/60/0,3343,en_2649_34533_1942460_1_1_1_37427,00.html
everyone is fairly close to one another, it's a matter of accounting though (eg: user fees, payroll tax, or income tax)

Should have a much clearer picture 5 years from now. Austria for example has been paying old age security cheques too richly, for working too few years, with a demographic that is too unbalanced. They have needed to restructure the whole thing or raise taxes for some time. Oh, and they played a small role in the international financial finagling so there goes a chunk of current income

EvilHenryPaulson Fri Mar 20 18:18:24 2009 CDT #
2 cents says:

CRbot, you are so funny! Thanks for uplifting our spirits with your jokes.

2 cents Fri Mar 20 18:19:13 2009 CDT #
scone says:

Should have a much clearer picture 5 years from now. Austria for example has been paying old age security cheques too richly, for working too few years, with a demographic that is too unbalanced. They have needed to restructure the whole thing or raise taxes for some time. Oh, and they played a small role in the international financial finagling so there goes a chunk of current income
-EHP
.
Yeah, I heard about that. We have family in Australia, so my mind is made up. It didn't hurt that we just spent 10 glorious days there, touring Sydney, Canberra, Melbourne, and several days with the folks at Brisbane. It's a great country, and stunningly beautiful.

scone Fri Mar 20 18:25:32 2009 CDT #
Hazard says:

" Seriously, what is it about Georgia? It's not they had a monopoly on stupid banks. "

Their stupid bank presidents graduated from the Univ of Ga?

Hazard Fri Mar 20 18:25:33 2009 CDT #
Professor Shays says:

In my earlier post I linked an MSN page where 197 banks were listed as having a high troubled asset ratio. There are 27 banks in this list having a worse troubled asset ratio than FirstCity Bank. Twelve (12) are in Georgia. I can't help that Sheila Bair's theme song must be "Georgia on My Mind...."

Professor Shays Fri Mar 20 18:28:04 2009 CDT #
Anonymous says:

This one's too small, throw it back!

Anonymous Fri Mar 20 18:31:26 2009 CDT #
That Barton Fink Feeling says:

"I often wonder where we would be if my generation had said, 'Hell no, we won’t go.'"

Considering your generation also sent mine to die in Vietnam for nothing, and since has sent another to die in Iraq for nothing, I'd say you haven't pondered these matters very thoroughly.

That Barton Fink Feeling Fri Mar 20 19:31:12 2009 CDT #

END