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Colonial Taken Into Receivership, Spun Off To BB&T
The Deposit Insurance Fund must be so happy it won't be depleted today. Let's recall the damage to the FDIC, pardon, BB&T:
A cursory glance at Colonial's most recent balance sheet indicates $26.4 billion in assets, and $20.2 billion in total deposits.
One wonders what the real value of the loans covering the deposits is.
Here is a look at the growth of Colonial's total time deposits. They obviously did not get a little ahead of themselves.
Who will buy Corus next?
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Friday isn't over yet :)
have not seen an updated FDIC fund balance in a long time. Seems like it must be less than $5B now
" If the FDIC were to seize Colonial, it would be the sixth-largest seizure, by assets, in American history. Such a large failure could strain the bank safety net. Colonial has $20 billion in deposits, while the FDIC insurance fund has dropped below $15 billion. The FDIC wouldn't have to cover every dime, but when Florida's BankUnited, with $12.8 billion in assets, failed earlier this year, it cost regulators nearly $5 billion. "
hat-tip to denninger .... the rest of the article is here http://market-ticker.denninger.net/archives/1283-Is-The-FDIC-Broke-And-Covering-It-Up.html the most recent article 30 min old; http://market-ticker.org/archives/1335-One-Of-Three-Down;-Is-The-FDIC-Still-Solvent.html
Blackrock. They drew straws at
Treasury last nite. Today is BFF.
SWAG: five banks today.
I will agree and go with 5 at least this weekend. You don't really see the news until late. They walk in right at closing.
Happy Friday, you are done.
Again this week my guess is 17!
Blackrock CEO has 700 mill to pay cash..
Its BlackSTONE CEO, Schwarzman, with that pay.
Banks make money by blowing up their customers -- not always, but they work twice as hard to unload bad paper onto someone else.
recommended: good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
It's unbelivable what we let these criminals get away w/... as the next reply says.. (Blackstone)
robo's riverboater friends were all over the bbt news....talk about a nosebleed spike.
Just put the stock into Goldman's computerized self esteem camp. Let it float around in electronic limbo while computers bolster it's self esteem like a little fish that swims upstream. Once it's achieved the strenght and self esteem to be released into the wild with plenty of self justification and fibionacci support it'll not only survive but thrive.
Nothing eats fish that swim upstream do they?
Bears.
Goldman will buy Corus with the Treasury gaurantee on all the losses on its assets.
This.
The FDIC will take quite a hit on this - BB&T is only buying bracjhes and deposits, after the FDIC takes it into receivership. My guess, a cost of $10 billion to the FDIC DIF
Don't forget to add the $1B + fees to be given to BAC.
does this mean BB&T is now too big to fail?
idiot. original tbtf.
LOL!!! CORS up 55%????!!!!
BBT was always too big to fail...
what about Alt-A's and Option ARM's in addition to CRE?
http://www.youtube.com/watch?v=YF7EhwcwEj8 enjoy
I love Mushroom Clouds with symphonic audio ambience , something about it just seems so right..
the beautiful elegance of destruction
"It is only after disaster that we can be resurected. It's only after we have lost everything that we are free to do anything. This is your life and it's ending one minute at a time"
http://www.youtube.com/watch?v=GHWRo5gzxl0
kick-ass song, and the whole FK soundtrack BTW .. i just watched the movie yesterday for like the 100th time ... the best movie of the 90s
well gee, if it isn't my most favorite song you have suggested so far†
oh shit i don't know how to bring it up as a youtube.
well i purchased this tune and really enjoy it, so very much, thank you.
http://www.youtube.com/watch?v=BWerj8FcprM&feature=player_embedded
Piano Concerto No.1 In B Flat Minor Op.23 4:34 Piotr Ilyich Tchaikovsky Classical Moods - 100 Top Classical Favorites of All Time World Purchased AAC audio file
You have to wonder if the FDIC deliberately leaks news about banks like Guaranty and Colonial weeks in advance of the closings in hopes that depositors will flee to other banks and reduce their (FDIC)responsibility. This has been oviously coming a long time. the raids on CNB were pretty high profile.
You don't have to wonder about that - of course they do. That works when only a few banks are in trouble...
But what do they do when MOST banks are in trouble? I have to think that the Fed-Tres complex will let a lot of soldiers fall before they let the FDIC fall.
huh? the losses don't go away b/c depositors get out -- after capital/fixed assets are wiped out, the losses are on the FDIC regardless of how the deckchairs are arranged on the deposit side...
The FDIC isn't going to leak news but BB&T would.
in related banking news, BAC/ML upgraded RF today.......i guess they are now following cramer.
Don't you know RF is a "solid" company with a "granite" balance sheet? Did I just describe RF or the entire banking sector?
I think it was the Corus guy out on the corner this morning. He was screaming "Get your Vegas and Miami condo towers here! Get your Vegas and Miami condo towers here."
BB&T has been outspoken about acquiring failed institutions but their target size is $15 bn. So with $25b in assets at Colonial they will have to have help from the FDIC for this transaction to make it a win win for BBT shareholders and their tangible common equity. BBT's TCE ration is 6.01% as of Q2.
If they don't get the right loss sharing help on CNS's toxic assets from the FDIC they will need to do a capital raise.
Now FBR's Paul Miller writes today "If BBT just acquires CNB's deposits and branches, the capital hit is not longer a concern;in this case, we would view the transaction as a BIG positive for BBT. It would be very accretive to NIM."
Your question is on point. What are the details for this deal?
Exactly who will be assuming CNB's so called "assets"? If it's BBT, they better have gotten a loss sharing agreement where the FDIC assumes the first $7 Billion and 50% of the remaining losses (probably another $7 Billion.)
Without that kind of loss sharing agreement, BBT shareholders are getting hosed. Makes me wonder if this was a Ken Lewis type shakedown by the FED.
It appears so. Market has caught on to it and quickly added that $1B to BAC's value, and then added another $3.5B for the sheer intangible value of having your guy be able to call his shots with the regulators (literally, with a phone call). This last judge knew the deal; time to deal with that SEC-settlement judge now.
buy why did he
I think Shelia will try out her new program today - sell the deposits and branches to a bank (BB&T) and the dredge loans for pennies on the dollar to a PE player, like Blackrock.
A modification of the good bank/bad bank structure.
Corus is going down and no one will buy them
Crap assets (big condo loans) with large loss severity, crap funding model (miniscule core deposits -- it's practically all brokered CDs*), and no physical infrastructure that could be turned around into a viable deposit gathering machine (something BankUnited, for all its woes, did have)
PJA
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*Tyler -- not that you don't have enough on your plate, but look into brokered CDs, which allow sh*t banks to accumulate deposits (to make sh*t loans!) by exploiting a regulatory loophole. It's almost as bad as the desperate premium CD rates offered by desperate banks (like Wachovia last summer).
If I remember correctly, ZH had a link to thebigpicture back about 6-8 weeks ago regarding brokered deposits. thebigpicture, of course, had the link to an NYT article regarding same. link below:
http://www.nytimes.com/2009/07/04/business/04brokered.html?_r=2&ref=toda...
My personal favorite is City Bank (in Washington state) Their business plan was to solicit brokered deposits and use the funds to make construction loans.
Nearly half of their deposits as of 12/31 were brokered deposits and over 70% of their loans were construction loans. Today, More than half of their loans are non performing and their NPA ratio is 47%
The FDIC ordered them to stop taking brokered deposits and to pay off brokered cds as they came due. But the order was "too little, too late" You can expect this City Bank to star on "FDIC Friday Nite" sometime later this year.
Problem: have 100k at corus cd which matures today. If I take a cashiers check today for the 100k and corus closes today, then my cashiers check.....??????? bounces? other banks wont convert a corus cashiers check to cash for days.
Since Colonial is going under, Corus will probably survive this weekend. The FDIC's not going to close 2 large banks on the same weekend - particularly if the PPT doesn't work their 3 o'clock magic and pull the S&P back to 1007. That might scare the sheeple.
But if you want to be safe, you could wait until Monday to get that cashier's check. If Corus fails, the bank that takes over administering their deposits will pay you.
If all you have at Corus is $100,000, you will be fine, you are well within the FDIC deposit insurance limits
Hey BoeingSpaceliner797,
Thanks for the link -- I did see that article. A snippet from that same NYT article:
"Hot money has bedeviled regulators for three decades and they are starting to fight back, albeit tentatively, devising new restrictions to keep the practice from taking more banks down. But in one of the hidden lobbying battles in Washington this year, the banks are pushing hard to keep the money flowing."
This issue deserves much more scrutiny and outrage, and ultimately correction. The themes ZH dwells on are all worthy, the problem is there are too many problems (targets). With deposits comprising up to 70% of a typical bank's balance sheet, I'd say the issue merits more scrutiny (of course, so does the disposition and managing of those deposits when loaned or invested in sh*t mortgage securities, but I digress...)
Bloomberg ran an even better article on brokered CDs last year
http://www.bloomberg.com/apps/news?pid=20601103&sid=aBaYKQD_UPcE&refer=us
Alarmingly, three former regulators -- people who should know better -- are running a firm (Promontory Financial) making a mint from brokered CDs: Alan Blinder, former OCC head Eugene Ludwig and former senior FDIC executive Mark Jacobsen. http://www.promnetwork.com/founders.html
We're doomed....