Another Friday, another bank failure
Integrity Bank in Georgia was shut down by the FDIC today. Bloomberg has the story.
Integrity Bank, with $1.1 billion in assets and $974 million in deposits, was shuttered by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corp. Regions Financial Corp., Alabama’s biggest bank, will assume all deposits from Integrity, which was run by Integrity Bancshares Inc. The failed bank’s five offices will open on Sept. 2 as branches of Regions, the FDIC said.
“Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance,” the FDIC said.
Banks are being closed at the fastest pace in 14 years as financial companies report more than $505 billion in writedowns and credit losses since 2007. California lender IndyMac Bancorp Inc., which had $32 billion in assets, was closed July 11 in the third-largest bank seizure, contributing to a 14 percent drop in the U.S. deposit insurance fund that had $45.2 billion at the end of the in the second quarter.
Scary to think that bigger banks like Wachovia and WaMu are in such deep trouble that they’re offering way above market rates on CDs. (hat tip CR) It’s a replay of the S&L crisis. Banks desperate for capital pay up for the one funding source that comes with a government guarantee: retail deposits.
Scary to think that WaMu has $140 billion of insured deposits, three times what’s left in FDIC’s Deposit Insurance Fund. IndyMac had only $18 billion of insured deposits, and will cost the DIF almost $9 billion. If WaMu goes bust, a much smaller loss rate would be enough to wipe out the DIF.
Get ready for another bailout.