Bank failure Friday + odd CIT factoid

July 18, 2009

(Updated 9:45PM) Four bank failures tonight, including two with over $1 billion of assets.  There have now been 57 bank failures so far in 2009.  Tonight’s damage to the Deposit Insurance Fund is estimated at $1.1 billion.

#54 — This is the 15th bank failure in Georgia.

  • Bank:  First Piedmont Bank, Windsor, GA
  • Acquirer: First American Bank & Trust, Athens, GA
  • Vitals:  As of July 6th … assets $115 million,  deposits $109 million
  • DIF Damage:  $29 million

#55

  • Bank:  BankFirst, Sioux Falls, SD
  • Acquirer: Alerus Financial, grand Forks, ND
  • Vitals:  As of April 30th … assets $275 million,  deposits $254 million
  • DIF Damage:  $91 million

#56

  • Bank: Vineyard Bank, Rancho Cucamonga, CA
  • Acquirer: California Bank & Trust, San Diego, CA
  • Vitals:  As of March 31st … assets $1.9 billion,  deposits $1.6 billion
  • DIF Damage:  $579 million

#57

  • Bank:  BankFirst, Sioux Falls, SD
  • Acquirer: Alerus Financial, grand Forks, ND
  • Vitals:  As of May 31st… assets $1.5 billion,  deposits $1.3 billion
  • DIF Damage:  $391 million

Rounding out this Friday’s BFF post, an odd factoid regarding CIT Bank (ht frog).  At the bottom of the bank’s FDIC info page, we see it has “total unused commitments” of $54.5 billion, 101x the Bank’s Tier 1 capital of $540 million.

For comparison, the multiple of total commitments to Tier 1 cap for two other troubled banks, Corus and Guaranty, is just 4x and 3x respectively.

To me, “unused commitments” sound like credit lines for which the bank may be contractually obligated.  If that’s what these are, then theoretically, the bank’s assets could swell exponentially.

But something doesn’t add up.  The company’s 10-Q (page 64) lists financing, purchasing and LOC commitments at $11.3 billion.

If any readers understand the discrepancy, please post a comment….

One comment

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swapped Temecula for a second BankFirst of Sioux Falls.

What’d Sioux Falls ever do to you?

Temecula also had a non binding letter of intent just weeks ago to pump capital in, but the PE group backed away after looking it over.

Posted by Andrew | Report as abusive