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Christopher Menkin
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Christopher "Kit" Menkin is of editor LeasingNews.org (http://www.leasingnews.org/), an internet trade publication for the finance/leasing industry. He has 41 years experience in the finance/leasing industry as well as being a founder of a commercial regional bank and serving on... More
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  • Failed Banks: Class Of 2012 1 comment
    Nov 28, 2012 12:04 PM

    By Robert Clark and Aarti Kanjani, SNL Financial

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    Regulators did not close any banks Friday, Nov. 23, leaving the year's total at 50. Last year, regulators had closed 90 banks through Nov. 25th.

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    As of Nov. 25, the FDIC entered loss-share agreements with the buyers of 19 of the 50 banks closed in 2012. In 2011, the FDIC entered loss-share agreements with the buyers of 58 of the 92 closed banks. In 2010, the FDIC entered loss-share agreements with the buyers of 130 of the 157 failed banks.

    The median cost to the deposit insurance fund at the time of announcement as a percentage of the failed banks' assets was 21% in 2012, with 50 failures. The median cost in 2011 and 2010 was 23%, and it was 29% in 2009.

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    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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  • Westcoaster
    , contributor
    Comments (582) | Send Message
     
    Christopher,

     

    Thanks for another great summary article. I live on the West coast and in our State many banks raised historically epic amounts of capital a few years ago. Some through TARP, some privately.

     

    Many of these banks are capitalized far beyond the well cap limit of 6 or 8% they contain reserves of 3% of loans, way beyond the 1% ALLL historically used.

     

    My question to you is what happens now.

     

    Banks hoarded capital to grow through these loss share agreements, now that those days in our states are over what are these boards going to do with their excess reserves and capital.

     

    I my opinion there just aren't the growth possibilities out there for them to profitably apply this capital. Will they buy back their undervalued shares? Will they merge with it? Can they just send it back to the shareholders, or is that very taxable at this point?

     

    People blame the FDIC and Basel III for this hoarding and over reserving but I also think its these managers who don't quite know what to do. But whoever is to blame the market is seriously under valuing these banks if I am right and they are truly over reserved and over capitalized.

     

    In my opinion considering a better economy it’s a huge waste of capital. Is this a completely new world, has this situation ever existed before?

     

    Any thoughts on this?
    30 Nov 2012, 11:56 AM Reply Like
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