Archives
September 2008
|
Regulators shut down an average of one bank about every 10 calendar days in the third quarter of this year, adding up to nine failed institutions in a 92 day span from July through September.
The nine failed institutions had assets of $347 billion and deposits of $214 billion at the time of closing. The Federal Deposit Insurance Corp, which protects individual deposits up to $100,000 per account, estimates the third quarter bank failures will cost between $6 billion and $10 billion.
Washington Mutual, a $310 billion in assets institution based in Henderson, Nev., was the last bank to fail in the third quarter, being shut by regulators on Sept. 25.
In a preemptive move prior to the seizure, the FDIC negotiated a deal for Washington Mutual Bank’s assets to be sold to JPMorgan Chase Bank, a $1.4 trillion in assets institution based in Ohio, to ensure consumer confidence and avoid mass deposit withdrawals.
Wachovia Bank, a $782 billion in assets institution based in North Carolina, avoided being the 10th institution shuttered in the third quarter only when the North Carolina-based organization was able to reach a deal to be acquired by Citigroup, which operates the $1.3 trillion in assets Citibank institution.
For the year, regulators have shut down 13 institutions. California, Nevada, and Missouri lead the nation in failed institutions with two banks each. Florida, Arkansas, Minnesota, Kansas, Georgia, West Virginia, and of course Washington state have each had one institution shuttered this year.
Before Washington Mutual Bank’s failure, federal regulators were busy on Sept. 19 shutting down Ameribank Inc., a 102-year-old community bank based in West Virginia with links to Florida.
Prior to the Ameribank’s closure, Silver State Bank in the Las Vegas suburb of Henderson was the last institution to be shut, that occurring on Sept. 5.
Silver State Bank was the second Nevada institution to fail this year. In July, banking regulators shut down the First National Bank of Nevada in Reno, which along with the First Heritage Bank in Newport Beach, Calif., was owned by First National Bank Holding Co. in Scottsdale, Ariz.
A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.
Before regulators shuttered Ameribank and Silver State Bank, the focus of examiners was on Greater Atlanta-based Integrity Bank, a $1.1 billion in assets institution that was shut on Aug. 29.
Working down the list of failed lenders, regulators seized Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas, on Aug. 22.
Three weeks earlier on Aug. 1, regulators shut First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast.
First Priority’s closing marked the first Florida institution to be closed by regulators in more than four years.
On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.
Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .
Copyright © 2008, Condo Vultures® LLC
|
|
Comments (0) :: Post A Comment! :: Permanent Link :: Email This Entry
|
|
Date: Sep. 19, 2008
Tags: None
Federal regulators swooped in to shut down the 12th financial institution of the year and the eighth since July 11, seizing a community bank with links to Florida that has been battered by nonperforming residential loans.
Ameribank Inc., a 102-year-old institution with assets of $113 million based in Welch, W.Va., was seized by the Office of Thrift Supervision on the afternoon of September 19.
The Federal Deposit Insurance Corp., which insures individual accounts up to $100,000, has been named receiver to oversee the liquidation of the failed bank and its eight locations.
“The cost of the transactions to the Deposit Insurance Fund is estimated to be $42 million,” according to an FDIC statement.
In preparation for the seizure, federal regulators worked out “purchase and assumption agreements” to sell off Ameribank’s deposits, locations, and other assets to viable suitors.
Pioneer Community Bank, a 77-year-old institution with $66 million in assets based in Iaeger, W.Va., will assume all of Ameribank’s five West Virginia locations along with the accompanying deposits and some assets.
The Citizens Savings Bank, a 106-year-old institution with assets of $426 million in Martins Ferry, Ohio, will assume all of failed institution’s three Ohio locations, along with the deposits and some assets.
“In addition to assuming all of the deposits of Ameribank, Inc., the acquiring institutions will purchase approximately $23 million in assets from the receivership,” according to the FDIC.
Until August, Ameribank had operated in Florida’s Palm Beach County for five years.
Ameribank at one time was attempting to relocate its headquarters from a low-wage mining community of West Virginia to wealthy Palm Beach County.
In 2003, Ameribank opened a branch location on North Military Trail in Palm Beach Gardens to make loans and collect deposits, which reached $14.6 million in June 2007, according to the latest FDIC data for individual locations.
By July 2008, Ameribank’s Palm Beach location plummeted to less than $1 million in deposits.
The dramatic plummet in deposits occurred in the months after federal banking regulators imposed in October 2007 a cease-and-desist order against Ameribank.
Regulators entered into a 16-page order with Ameribank for “unsafe and unsound banking practices” related to a “failure to comply” with lending limitations, real estate lending standards, loan documentation, and credit underwriting, according to the OTS.
Ameribank’s problems in part were due to risky no-money-down residential loans purchased from Lending One, a Boca Raton mortgage broker, according to the Palm Beach Post.
“The no-money-down one-year home mortgage and renovation loans were designed for speculators who wanted to buy fixer-uppers and flip them for sale at a higher price,” according to the Palm Beach Post. “Borrowers paid Lending One a high interest rate of 15 percent, plus three to five points at closing. In a plan developed by Ameribank's former president, Lou Dunham, Ameribank assumed the risk for an 8 percent cut of the interest, buying hundreds of loans in Florida, Louisiana, Ohio and eight other states.”
Once the housing market began to slow, many of the speculators who owed Ameribank simply stopped paying when they couldn’t flip their investments.
Ameribank lost $10.1 million in 2007 after posting a profit of $2.1 million in 2006. In the first half of 2008, Ameribank lost an additional $6.9 million.
Ameribank is the first institution to be closed in West Virginia since First National Bank of Keystone in September 1999.
Prior to the Ameribank’s closure, Silver State Bank in the Las Vegas suburb of Henderson was the last institution to be shut, that occurring on Sept. 5.
Silver State Bank was the second Nevada institution to fail this year. In July, banking regulators shut down the First National Bank of Nevada in Reno, which along with the First Heritage Bank in Newport Beach, Calif., was owned by First National Bank Holding Co. in Scottsdale, Ariz.
For the year, California, Nevada, and Missouri lead the nation in failed institutions with two banks each. Florida, Arkansas, Minnesota, Kansas, Georgia, and of course West Virginia, have each had one institution shuttered this year.
A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.
Before regulators shuttered Ameribank and Silver State Bank, the focus of examiners was on Greater Atlanta-based Integrity Bank, a $1.1 billion in assets institution that was shut on Aug. 29.
Working down the list of failed lenders, regulators seized Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas, on Aug. 22.
Three weeks earlier on Aug. 1, regulators shut First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast. First Priority’s closing marked the first Florida institution to be closed by regulators in more than four years.
On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.
Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .
Copyright © 2008, Condo Vultures® LLC
|
|
Comments (0) :: Post A Comment! :: Permanent Link :: Email This Entry
|
|
Date: Sep. 18, 2008
Tags: None
Reminiscent of the Savings & Loan crisis of the late 1980s, the U.S. government is considering creating a Resolution Trust Corporation-like entity that could firesale off all of the bad debt accumulated by the nation’s banks, according to CNBC.
As U.S. Treasury searches for answers following one of the most volatile weeks for the stock market in decades, Secretary Henry Paulson has reportedly received President Bush’s clearance to approach Congress about the idea of creating a third-party entity to liquidate the billions of dollars of bad debt on the ledgers of many of the nation's financial institutions.
“Such a move, according to its advocates, would allow banks to shovel bad debt off their balance sheets and allow the firms to go back to business as usual,” according to the news report. “It would also eliminate the need for individual company bailouts. In turn, that could allow the housing market to recover because it would restore banks willingness to lend.”
This is the second time in a month that the RTC concept has come up.
Before the Treasury Department took over mortgage giants Fannie Mae and Freddie Mac earlier this month, Fannie Mae had announced plans to unload thousands of repossessed homes by way of opening offices in South Florida and Southern California to “get the property out the door.”
Fannie Mae opened an office in Fort Lauderdale, Fla., in August, and was scheduled to open a sister office in Irvine, Calif., in September.
The satellite offices are designed to streamline Fannie Mae’s efforts to unload bank-owned properties known as Real Estate Owned (REO), reduce defaults, and better manage repossessed properties until the inventory can eventually be liquidated.
“Real estate is at some level local – it makes sense to be local,” said Daniel H. Mudd, former president and chief executive officer of Fannie Mae at the time during an Aug. 8 conference call with analysts to discuss second quarter results.
“We’re adding hundreds of staff as well as contractors to our loss mitigation team, and we have effectively quintupled the amount of senior management that is — dedicated to this effort.”
Fannie Mae has had to rethink its approach as the number of Real Estate Owned properties repossessed in 2008 reached 54,173 on June 30. By comparison, Fannie Mae repossessed 49,121 bank-owned properties for the entire year of 2007, and 36,580 for all of 2006.
Fannie Mae’s repossessed properties are concentrated primarily in six states, including the two where the satellite offices are opening within the next 45 days.
Florida accounts for 5 percent, or 2,681, of the bank-owned properties controlled by Fannie Mae. California accounts for an additional 9 percent, or 4,814, of the Real Estate Owned on the Fannie Mae books.
It is unclear if Fannie Mae plans to open additional offices in other downward spiraling markets where bank-owned properties are spiking such as Michigan with 10,263 bank-owned properties, Ohio with 3,402, Arizona with 1,978, and Nevada with 1,205.
Fannie Mae’s immediate focus is to unload the growing inventory of properties that have been repossessed by the government sponsored, privately-owned entity that is the largest trader of residential mortgages on the secondary market.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don’t forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™.
Copyright © 2008, Condo Vultures® LLC
|
|
Comments (0) :: Post A Comment! :: Permanent Link :: Email This Entry
|
|
Date: Sep. 16, 2008
Tags: None
Bankrupt Wall Street investment bank Lehman Brothers Holdings Inc. and its subsidiaries have nearly $2 billion in commercial real estate loans in Miami and South Florida, according to a new report by Condo Vultures® LLC.
Lehman (NYSE: LEH) has 35 outstanding loans in South Florida with 22 loans in Miami-Dade County totaling $964 million, and 13 in Broward County totaling $899 million, according to the report by the Bal Harbour, Fla.-based consultancy.
Lehman and its subsidiaries are the lead lender on a number of high profile South Florida real estate projects, ranging from the new Trump Hollywood oceanfront condominium under construction to the high-end Aventura Mall, the two-story Galleria of Key Biscayne retail center to the Courvoisier Centre office complex on Brickell Key, according to the Condo Vultures® report.
The report only identifies the lead lender and not any participants that may own a share of the syndicated debt originated by Lehman and/or its subsidiaries.
Hamstrung by about $60 billion in troubled real estate loans, Lehman’s debt stood at $613 billion when the 158-year-old Wall Street investment bank with assets of $639 billion when it filed for Chapter 11 bankruptcy reorganization protection on Sept. 15.
The bankruptcy action was Lehman’s last option after failing over the weekend to find a suitor.
Lehman is expected to sell off many of its assets in the weeks and months ahead to satisfy creditors. Citigroup is Lehman’s largest unsecured creditor with $138 billion in bonds. The Bank of New York Mellon Corp. is owed about $17 billion, according to the Associated Press.
The British bank Barclays is reported to be in discussions to buy Lehman's "U.S. broker-dealer business and include Lehman's equity, fixed income, forex and M&A advisory business in the U.S.," according to Reuters.
At the end of trading Monday, Lehman’s stock closed at 21 cents, down 94 percent or $3.44 per share from Friday. Lehman’s 52 week high price was $67.73, according to Yahoo! Finance.
Lehman’s bankruptcy ranks as the largest in U.S. history based on assets held. Disgraced telecom company WorldCom now ranks second with assets of $104 billion, and the failed energy company Enron Corp. is third with $63 billion.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .
Copyright © 2008, Condo Vultures® LLC
|
|
Comments (0) :: Post A Comment! :: Permanent Link :: Email This Entry
|
|
Date: Sep. 10, 2008
Tags: None
The U.S. Treasury Department’s surprise takeover of Fannie Mae and Freddie Mac appears to be the last of three symbolic steps necessary to signal the psychological bottom of the South Florida real estate market.
Expectations are that the Fed’s dramatic actions on Sunday, Sept. 7, will inevitably restore liquidity to the residential financing market now that the U.S. government controls the two largest mortgage companies in the country.
Credit, not ready, willing, and able buyers, had been the biggest obstacle for a well-qualified purchaser with a healthy down payment to complete a real estate transaction.
Immediately following the takeover, interest rates on 30-year conventional fixed mortgages have dropped by about 50 basis points from a close of 6.25 percent on Friday, Sept. 5, the last business day before Fannie Mae and Freddie Mac were seized by the Feds.
This is not to say that the Fed’s action will lead back to the days of 100 percent “no doc” financing anytime soon or cause an immediate strengthening in real estate values, especially in oversupplied market such as Greater Downtown Miami, the Las Vegas Strip, or San Diego’s Gaslamp Quarter.
Instead, prices are expected to begin to stabilize in more and more submarkets besides the most popular and/or mature markets such as South Beach as buyers and borrowers once again have access to credit secured by real estate.
Restoring credit to the housing market was the last factor that some industry watchers have been awaiting since a majority of the construction cranes used to build the new condo towers in places such as Greater Downtown Miami have already come down, which signals the end of new development for several years.
The second contributing factor to the idea of a psychological bottom is the sudden willingness of banks to discount their residential real estate portfolios of both existing loans and bank-owned properties.
The discounts have increased since July when banking regulators began to aggressively seize the institutions with troubled loan portfolio that had been stalling the inevitable as they searched for a solution. Regulators have shut seven institutions since July 11, and 11 for the year.
While the symbolic bottom appears close, the statistical bottom of a particular market will only be reached when there are three consecutive months of increased sales by quantity and three straight months of increased median sales price.
The problem that creates for discount buyers is that real estate pricing is not valuated by the minute like a share in the stock market so the bottom of the housing market will only be defined weeks later once the final data from the previous month can be analyzed.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .
Copyright © 2008, Condo Vultures® LLC
|
|
Comments (0) :: Post A Comment! :: Permanent Link :: Email This Entry
|
|
Date: Sep. 9, 2008
Tags: None
A Las Vegas-based bank with $2 billion in assets has been shut down by banking regulators, marking the 11th U.S. institution to fail in 2008 and the seventh since July 11.
Silver State Bank in the Las Vegas suburb of Henderson was seized on Sept. 5 by the Nevada Financial Institutions Division, and immediately placed in the control of the receiver, the Federal Deposit Insurance Corp.
The FDIC estimates the failure of Silver State Bank will cost the insurance fund between $450 million and $550 million.
The deteriorating real estate market of the United States is prompting federal regulators to step in to shore up the wobbling banking industry that has suffered from problem loans made at the peak of the market.
Founded in 1996, Silver State Bank employed 345 people at its 14 branches in Greater Las Vegas area and four locations in the Greater Phoenix area.
Silver State Bank lost $85.7 million in the first half of the year ending June 30, after earning a profit of $12.3 million in the first half of 2007, according to FDIC data.
Silver State Bank, which had a loan portfolio of $1.6 billion on June 30, had an abnormally high ratio of problem loans. The bank’s noncurrent loans to loans ratio spiked in 2008 to 15.38 percent from 0.01 percent in 2007.
The skyrocketing noncurrent loans ratio resulted from a spike in problem real estate loans, especially construction and development financing that increased by nearly 22 percent.
In a deal structured before Silver State Bank’s failure, the FDIC entered into a purchase and assumption agreement whereby Silver State’s $1.7 billion in insured deposits in both Nevada and Arizona would be transferred to one of two institutions.
Nevada State Bank, a 49-year-old institution based in Las Vegas with $3.8 billion in assets, assumed the Nevada deposits. The National Bank of Arizona, a 36-year-old institution based in Tucson with $5.2 billion in assets, was the recipient of the Arizona deposits.
“In addition to assuming the failed bank's insured deposits, Nevada State Bank will purchase a small amount of assets comprised of cash and securities,” according to an FDIC statement. “The FDIC will retain the remaining assets for later disposition.”
Silver State Bank is the second Nevada institution to fail this year. In July, banking regulators shut down the First National Bank of Nevada in Reno, which along with the First Heritage Bank in Newport Beach, Calif., was owned by First National Bank Holding Co. in Scottsdale, Ariz.
At the time of closing, the First National Bank Holding Co. had combined assets of $4.6 billion and 28 locations scattered around Arizona, California, and Nevada. The estimated cost of the failure of the First National Bank Holding Co. is $862 million, according to the FDIC.
For the year, California, Nevada, and Missouri lead the nation in failed institutions with two banks each. Florida, Arkansas, Minnesota, Kansas, and Georgia, have each had one institution shuttered this year.
A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.
Before regulators swooped in on Silver State Bank in Nevada, the focus of examiners was on Greater Atlanta-based Integrity Bank, a $1.1 billion in assets institution that was shut on Aug. 29.
Working down the list of failed lenders, regulators seized Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas, on Aug. 22.
Three weeks earlier on Aug. 1, regulators shut First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast. First Priority’s closing marked the first Florida institution to be closed by regulators in more than four years.
On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.
Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .
Copyright © 2008, Condo Vultures® LLC
|
|
Comments (0) :: Post A Comment! :: Permanent Link :: Email This Entry
|
Page 1 of 1
|
Categories
Favorite Links
|
