For Immediate Release
Chicago, IL – February 9, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: JP Morgan Chase (JPM), Fifth Third Bancorp (FITB), PNC Financial (PNC), U.S. Bancorp (USB) and Regions Financial (RF).
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Here are highlights from Monday’s Analyst Blog:
Another 1 Down, Bank Failures Hit 16
1st American State Bank of Minnesota had total assets of about $18.2 million and total deposits of about $16.3 million as of Dec 31, 2009.
The recent failure represents another impact on the Federal Deposit Insurance Corporation’s (FDIC) fund meant for protecting customer accounts, as it has been appointed receiver for the bank. The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets. When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of bank failures has significantly stretched the regulator’s deposit insurance fund. However, the FDIC has access to the Treasury Department’s credit line of up to $500 billion.
The failure of 1st American State Bank of Minnesota is expected to cost the federal deposit insurance fund (DIF) about $3.1 million.
Minnesota-based Community Development Bank, FSB will assume all of the deposits and assets of 1st American State Bank of Minnesota. The FDIC entered into a loss sharing agreement with Community Development Bank, FSB on $11.7 million of 1st American’s assets.
Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates bank failures to cost about $100 billion over the next three years. The failure of Washington Mutual in 2008 was the largest in U.S. banking history. It was acquired by JP Morgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), PNC Financial (PNC), U.S. Bancorp (USB) and Regions Financial (RF). Though current signals indicate that the economy may stabilize, we expect loan losses on the commercial real estate portfolio to remain high for banks that hold large amounts of high-risk loans.
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