Columbian Bank and Trust of Kansas Closed by U.S. Regulators

[peternap]

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9iX_1ShWWAs&refer=home

Columbian Bank and Trust of Kansas Closed by U.S. Regulators

By Alison Vekshin and Ari Levy

Aug. 23 (Bloomberg) -- Columbian Bank and Trust Co. of Topeka, Kansas, was closed by U.S. regulators, the nation's ninth bank to collapse this year amid bad real-estate loans and writedowns stemming from a drop in home prices.

The bank, with $752 million in assets and $622 million in total deposits, was shuttered by the Kansas state bank commissioner's office and the Federal Deposit Insurance Corp., the FDIC said yesterday in a statement.

Citizens Bank and Trust will assume the failed bank's insured deposits. Columbian Bank's nine branches will open Aug. 25 as Citizens Bank and Trust offices, the FDIC said. Customers can access their accounts over the weekend by writing checks or using ATM or debit cards.

``There is no need for customers to change their banking relationship to retain their deposit insurance coverage,'' the FDIC said.

The pace of bank closings is accelerating as financial firms have reported more than $500 billion in writedowns and credit losses since 2007. The FDIC's ``problem'' bank list grew by 18 percent in the first quarter from the fourth, to 90 banks with combined assets of $26.3 billion.

Prior to yesterday, the FDIC had closed 36 banks since October 2000, according to a list at fdic.gov. The U.S. shut 12 banks in 2002, the highest in the period, and 2005 and 2006 had no closures.

U.S. bank regulators closed Florida's First Priority Bank on Aug. 1; Reno-based First National Bank of Nevada, Newport Beach, California-based First Heritage Bank, and Pasadena-based IndyMac Bancorp Inc. in July; Staples, Minnesota-based First Integrity Bank and ANB Financial in Bentonville, Arkansas, in May; Hume Bank in Hume, Missouri, in March; and Douglass National Bank in Kansas City, Missouri, in January.

[desdawg]

I was trying to find a list of the 90 banks on the possible failure list and it isn't available to the public. It is like a double edged sword that cuts both ways. Publishing the list could cause a run on those institutions but on the other hand potential new depositors are not forewarned.

[muldoon]

This is obseedian's list, its very good and lists a little over 130 troubled banks based on their financials.  On it, Columbian Bank was number #50.  It doesn't cover everthing, but a good place to start from. 
http://www.geocities.com/tubeguy@rogers.com/troubledbanks.htm

It is based on public data at evaluation of the "Texas Ratio"
http://www.snlcenter.com/bandt.asp

"The term "Texas Ratio" was coined by RBC Capital Markets analyst Gerard Cassidy and others at the firm's equity research teams, who used the ratio to identify potential bank failures when covering banks in Texas during the 1980s, a period when the state was a receivership hotspot. The Texas ratio is calculated by taking total nonperforming assets, including loans 90 or more days delinquent, and dividing them by tangible total equity plus loan loss reserves.
"The regulators essentially look at capital as a firewall. If you breach the firewall, you're going out of business," Cassidy told SNL. "If somebody's at 101%, does that mean they're going to go out of business? Probable. One hundred and twenty percent? A higher probability. The higher a company goes above 100%, the more likely it is the company's not going to make it." "

If one had access to a bloomberg terminal, they could also use the CDS (credit default swaps) prices to see risk pricing which is another good indicator of health.   That approach being based on the premise of the sicker they get the more they pay to borrow money. 

[Sassy]

Interesting info...  was looking for one of the banks we do business with.  I know that last fall my dad had stock in one of the banks - had asked my brother to cash it in but he forgot - was worth $40,000 at the time; after my dad passed in February, we checked the value - around $3000 - haven't checked it since, that I know of.  The lawyer is still milking the estate - keeps charging a $1000 or two every month for what, we don't know, but if we ask, we get charged for him explaining what he's done; one of my brothers called him up the other day & asked what's going on.  So the lawyer scheduled another meeting - just my brothers were able to attend as my sister & I were working - anyway he asked for all the same stuff he'd already rec'd & researched...  he's going to send out letters to all the same places again - "just so he can make sure he's got everything"    so that he can charge a few $1000 more...  finally remembered the title of the book I read by John Grisham awhile back "The Street Lawyer  the lawyers in the company the main character worked for were totally focused on how many hours they could bill for - they didn't care about anything else, just billing for as many hours as they could.

No where else - not even with doctors - do you have to pay for them explaining what they did that they've already charged you for.  If a doctor does an exam on you & you want to call them up for the results, they don't charge you again for giving you the results    Just amazing - and your hands are pretty much tied...  geeesh 

Sorry about the rant... 

[desdawg]

I just opened an account with one of the banks on that list. #79 AM-Trust. Fortunately it was a small account. They are busy opening branches here in AZ and just opened in a new building in Maricopa. They are offering a better interest on savings than anyone else around. But it is only a good rate if they are around to pay it. I guess that is one way to bolster your deposits. I was trying to check them out but I didn't ask the question soon enough. I should have figured you knew where to look Muldoon. All they have to do is survive for six months and I will be out of the woods.

[benevolance]

Sassy

Our old buddy william shakespeare said it best..

When asked what he would do if he was king...He said...well the first thing we would need to do is kill all the lawyers

[Sassy]

hmmm, that's a thought... but I have a cousin who is a lawyer - he seems like a nice guy, hopefully he isn't like most lawyers I've seen or heard of... 

[benevolance]

Robert frost said that a trial is a place where 12 men and women sit to decide who has the best lawyer..

the legal system is something I do not place a whole lot of faith in... in General...Lawyers do nothing to improve this situation

[desdawg]

I used a lawyer one time who kept a logbook on his desk. If he did anything that pertained to me it got logged and was a minimum quarter hour charge. I often wondered how many hours were in his day. With a nanosecond being 15 minutes long. I moved on when I learned how his system worked. I didn't know about it up front.

[benevolance]

yeah... take 20 phone calls book them all as 15 minutes and of course you charge $300 an hour... nice work if you can get it...

And the lawyers are supposed to be the upstanding citizens.. they are theives

[muldoon]

Some new banking information that's come out yesterday and this morning. 

From yesterday, FDIC's Q2 numbers were posted and apparently the troubled bank list has grown 30% in the last few months, it was 9- now up to 117. 
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afbiu39eNA4E

This morning, we got the news that I think has been coming for some time, it seems the FDIC is running low on funds and wants to borrow from the treasury.  After only 9 banks, they have depleted their funding and are coming where else?  The taxpayer. 
http://online.wsj.com/article/SB121977767814673649.html?mod=hpp_us_whats_news

Disgusting, when do the pitchforks and torches come out? 

[muldoon]

ohh yeah, since the fdic put out new numbers last night the troubled list got updated as well.
Here is the one based on March 31 numbers (posted earlier) http://www.geocities.com/tubeguy@rogers.com/troubledbanks08Q2.htm
Here is the new one based on June 31 numbers http://www.geocities.com/tubeguy@rogers.com/troubledbanks.htm

There has been some very noticeable deterioration. 

I love the #1 spot, Integrity Bank in Georgia.  Here's a cache of their investor relations page:
http://www.snl.com/irweblinkx/corporateprofile.aspx?iid=4053754

Their stock is 3 cents, and its down 2 cents or 40% today.  Does that instill confidence or what?

[desdawg]

I just looked at the list again. The bank where I opened my account moved from it's #79 spot to #113. I thought my eyes were deceiving me. The original link you posted was updated. This time I printed the list so I can check myself later. They are soliciting hard to get new deposits. I got a free gift for opening a checking account I was disappointed that it wasn't a toaster. Since then I have received an e-mail and a thank you card in the mail. It is amazing to me that this bank is opening new branches.  I had tried to look up their stock and see if anything was being said. Seems there is an insurance/financial services company with the same name that operates out of Bermuda. I asked at the branch if I had the right stock symbol and was told this is a family owned privately held company out of Cleveland, OH. So I was looking at the wrong company. AFSI. How confusing is that. I was trying to do some research and went down the wrong trail. Google took me to the publicly traded AM-Trust. I guess I better get to work.

[Sassy]

Some new banking information that's come out yesterday and this morning. 

From yesterday, FDIC's Q2 numbers were posted and apparently the troubled bank list has grown 30% in the last few months, it was 9- now up to 117. 
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afbiu39eNA4E

This morning, we got the news that I think has been coming for some time, it seems the FDIC is running low on funds and wants to borrow from the treasury.  After only 9 banks, they have depleted their funding and are coming where else?  The taxpayer. 
http://online.wsj.com/article/SB121977767814673649.html?mod=hpp_us_whats_news

Disgusting, when do the pitchforks and torches come out?

  "Ms. Bair said the borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank. The borrowed money would be repaid once the assets of that failed bank are sold.

I couldn't read the rest of the article, but it was talking about the 100's of banks that failed in the 90's when the FDIC last had to borrow from the "US Treasury" so did the failed banks ever pay back the loans?  And if FDIC again borrows from the treasury & bails out these failed banks, if the shares are only worth 2 cents (as cited on the one bank) what do they have to pay back with when liquidated?

Maybe all citizens who have loans should just borrow from the US Treasury to bail them out...  that's where my retirement money is supposedly...  of which we all know there isn't any, the gov't has already raped that acct, as it has social security, & everything else - otherwise we wouldn't be trillions of $$$ in debt... 

So the banks make risky investments/loans & the US citizen again bails them out while the top dogs run away with millions of $$$ in their pockets for destroying the banks...  hmmmmm, about as good of a racket as the lawyers have...   

One of our local banks is #66...  there was just an article about Merced, CA in The Daily Reckoning
on the terrible financial shape the county is in... 

[muldoon]

I love the #1 spot, Integrity Bank in Georgia.  Here's a cache of their investor relations page:
http://www.snl.com/irweblinkx/corporateprofile.aspx?iid=4053754

Their stock is 3 cents, and its down 2 cents or 40% today.  Does that instill confidence or what?

That was 8/27, todays 8/29.  Friday is FDIC bank closure day.  I think we saw this one coming. 


http://www.marketwatch.com/news/story/georgia-regulators-close-integrity-bank/story.aspx?guid={9C2568FB-FFA6-4CBF-8218-CD914102F252}&dist=msr_1

Bank Closing - Integrity Bank, Alpharetta, GA

On August 29, 2008, the FDIC was named as receiver for Integrity Bank, Alpharetta, Georgia by the Georgia Department of Banking and Finance. All deposits were transferred to the acquiring institution; for further information, please visit the FDIC web site: Integrity Bank (www.fdic.gov).